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Exhibit 10.23
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("AGREEMENT") dated as of September 6, 2000 by and
between Aetna Inc., a Connecticut corporation, and Xxxx X. Xxxx, M.D.
("EXECUTIVE") (certain capitalized terms used herein being defined in Article
7).
WHEREAS, the Board desires to employ Executive in the positions and on
the terms and conditions set forth below, and the Executive desires to accept
such employment; and
WHEREAS, pursuant to the Merger Agreement Aetna Inc. will be selling
its financial services business and distributing to its shareholders both a cash
dividend and all of the equity securities of its health care business, Aetna
U.S. Healthcare Inc., a Pennsylvania corporation (the "HEALTH CARE BUSINESS")
which, following the consummation of the transactions contemplated by the Merger
Agreement (the "COMPLETION"), will change its name to Aetna Inc.
WHEREAS, the Company and Executive desire to enter into this Agreement
embodying the terms of such employment;
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements of the parties set forth in this Agreement, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE 1
POSITION; TERM OF AGREEMENT
SECTION 1.01. Position. (a) On September 15, 2000 (the "EFFECTIVE
DATE"), Executive shall commence service as the chief executive officer and
president of the Health Care Business and as a member of the Board.
(b) (i) Upon Completion, Executive shall become the Chief Executive
Officer of the Public Company and, not later than December 31, 2001, shall
become Chairman of the Board.
(ii) Failing Completion not later than June 30, 2001, Executive
shall become Chief Executive Officer of the Company and, not later than December
31, 2001, shall become Chairman of the Board.
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(c) In such positions, Executive shall have such duties and authority,
consistent with such positions, as shall be determined from time to time by the
Board; provided, that after Executive becomes Chief Executive Officer of the
Company he shall be the highest ranking executive of the Company and shall
report only to the Board.
(d) Starting on the Effective Date, during the Employment Term
Executive will devote substantially all of his business time to the performance
of his duties hereunder and will not engage in any other business, profession or
occupation for compensation or otherwise which would conflict with the rendition
of such services either directly or indirectly, without the prior written
consent of the Board; provided that nothing herein shall be deemed to preclude
Executive, subject to the prior written consent of the Board, from serving on
any business, civic or charitable board, as long as such activities do not
materially interfere with the performance of Executive's duties hereunder. If
the Company concludes that it is desirable, upon Company's request Executive
will resign from any boards of directors on which he serves.
SECTION 1.02. Term. Executive shall be employed by the Company for a
period commencing on the Effective Date and, subject to earlier termination or
extension as provided herein, ending on December 31, 2003 (the "EMPLOYMENT
TERM"). On December 31, 2003 and December 31, 2004, the Employment Term shall
automatically be extended for one additional year unless not later than 180 days
prior to such date the Company or Executive shall have given written notice of
its or his intention not so to extend the Employment Term.
ARTICLE 2
COMPENSATION AND BENEFITS
SECTION 2.01. Base Salary. Starting on the Effective Date, the Company
shall pay Executive an annual base salary (the "BASE SALARY") at the initial
annual rate of $1,000,000, payable in equal monthly installments or otherwise in
accordance with the payroll and personnel practices of the Company from time to
time. Base Salary shall be reviewed annually by the Board or a committee thereof
to which the Board may from time to time have delegated such authority (the
"COMMITTEE") for possible increase (but not decrease) in the sole discretion of
the Board or the Committee, as the case may be.
SECTION 2.02. Bonus. Subject in each case to Executive's continued
employment as contemplated hereby:
(a) (i) With respect to each fiscal year all or part of which is
contained in the Employment Term, Executive shall be eligible to participate in
the Company's annual incentive plan, with a target bonus opportunity of 150% of
Base Salary, a threshold bonus opportunity of 75% of Base Salary and a maximum
bonus opportunity of 300% of Base Salary or such other greater amount as the
Committee may determine in its sole
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discretion. Except as provided in Section 2.02(a)(ii) or as may be payable
pursuant to Article 3, Executive is not guaranteed the payment of any annual
bonus.
(ii) Notwithstanding the foregoing, Executive shall be entitled to
a minimum annual bonus (x) for 2000 of $375,000 and (y) for 2001 of $1,000,000
subject, in each case, to Executive being employed by the Company on the last
day of such year.
(b) Beginning in 2001, Executive shall be eligible to participate in
the Company's long-term incentive program, with a target long-term award
opportunity of 150% of Base Salary or such greater amount as the Committee may
determine in its sole discretion. As further compensation, Executive will be
eligible, beginning in 2001, to participate in the other compensation
arrangements, including equity-based programs, in which substantially all senior
executives of the Company are generally eligible to participate.
(c) The Company shall pay to Executive on or as soon as reasonably
practicable after the Effective Date a $2,000,000 sign-on bonus.
(d) The Company shall pay to Executive on July 3, 2001 a retention
bonus of $1,400,000 (the "RETENTION AMOUNT").
SECTION 2.03. Initial Option and Restricted Stock Unit Grants. (a) (i)
The Company shall cause the grant on the Effective Date to Executive of (x)
options to purchase 300,000 shares of the Company's common stock with a per
share exercise price equal to 100% of the fair market value of such shares on
the Effective Date (the "BASIC OPTIONS") and (y) options to purchase 200,000
shares of the Company's common stock with a per share exercise price of 133% of
the fair market value of such shares on the Effective Date (the "PREMIUM
OPTIONS"), which options shall, in each case, have a ten (10) year term,
post-termination exercise provisions that, except as otherwise provided herein,
are comparable to such provisions in the form of option previously provided to
Executive, and become exercisable in 3 equal annual installments commencing on
the first anniversary of the Effective Date subject to the Executive's continued
employment hereunder (the exercisability of such awards not to be accelerated by
the Completion) (collectively, "PROVISIONS"). Such grants shall be equitably
adjusted in a manner consistent with the FASB Emerging Issues Task Force Issue
No. 90-9 to reflect the Completion (the adjustment ratio used therefore, the
"ADJUSTMENT RATIO") provided that if such adjustment and the Second Tranche
described in (ii) below would result in the aggregate number of shares
underlying such options exceeding 2,000,000, then a sufficient number of options
shall be cancelled for no consideration to eliminate such excess, such
cancellations, if any, to be first with respect to the Second Tranche, next to
the extent necessary with respect to the Premium Options and last with respect
to the Basic Options.
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(ii) On the earlier of (A) immediately after Completion or (B)
January 1, 2001, the Company shall cause the grant (or if such grant is
to be made after Completion, shall use its best efforts to cause the
grant) to Executive of options to purchase 100,000 shares of the
Company's common stock (multiplied by the Adjustment Ratio if such
earlier date is the date of the Completion) having the Provisions and
having a per share exercise price equal to (x) the exercise price of
the Premium Options (as adjusted in the case of the grant referred to
in (A) above) or (y) if higher, the fair market value of the underlying
shares on the grant date (the "SECOND TRANCHE"). Such Second Tranche
may also include any additional equitable award as the Committee may,
in its sole discretion, determine.
(iii) In the event that, in connection with the Completion,
the equitable adjustment of the Basic and Premium Options does not
result in the aggregate amount of such adjusted grants and the Second
Tranche relating to, after Completion, at least 1,000,000 shares of the
Company's common stock, the Company shall cause a supplemental grant of
Company stock options to be made to Executive having the Provisions and
having an exercise price as to half of such options which is the same
as for the adjusted Basic Options (or, if higher, the fair market value
of the underlying shares on the grant date) and as to the other half of
such options which is the same as for the Second Tranche, such that the
aggregate number of shares of Company common stock underlying (x) the
adjusted Basic and Premium Options, (y) the Second Tranche and (z) such
supplemental option grant shall equal 1,000,000.
(b) Company shall cause the grant to Executive of 25,000 restricted
stock units on the Effective Date, which units shall vest, subject to
Executive's continued employment with the Company, in three equal annual
installments commencing on the first anniversary of the Effective Date (the
vesting of such award not to be accelerated by the Completion). Such grant,
which shall include dividend equivalent rights and shall be subject to elective
deferral, shall be equitably adjusted entirely into restricted stock units of
Public Company stock to reflect the Completion and shall not entitle the
Executive to a cash distribution upon Completion.
SECTION 2.04. Life Insurance. During the Employment Term, Company shall
pay an annual premium of $63,000 on life insurance covering Executive and
payable to beneficiaries designated by Executive.
SECTION 2.05. Employee Benefits. (a) During the Employment Term
Executive shall be eligible for employee benefits (including fringe benefits,
vacation, pension and profit sharing plan participation and life, health,
accident and disability insurance) no less favorable than those benefits made
available generally to senior executives of the Company.
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(b) On the Effective Date, Executive shall be eligible, upon
termination of employment other than for Cause, for the Company's retiree
medical care benefits under the Company's Medical Plans as in effect from time
to time and, for purposes of eligibility for subsidized benefits thereunder,
shall be credited with two years of service for each full year of service of
Executive with the Company commencing on the Effective Date.
(c) Upon attaining age 65, Executive shall be entitled to a single
life annuity for his lifetime under the Company's supplemental non-qualified
defined benefit plan of not less than $300,000, offset by the single life
annuity equivalent amount, using the factors identified in said supplemental
non-qualified defined benefit plan, attributable to Company contributions to the
Company's qualified and non-qualified defined contribution and defined benefit
plans (the "PENSION BENEFITS"). Executive shall vest in the Pension Benefits,
subject to continued employment with the Company, in five (5) equal annual
installments commencing on the Effective Date. The Pension Benefit shall be
payable in the form and at the times provided, from time to time, in the
Retirement Plan.
SECTION 2.06. Business Expenses; Travel; Office. (a) Reasonable travel,
entertainment and other business expenses incurred by Executive in the
performance of his duties hereunder shall be reimbursed by the Company in
accordance with Company policies as in effect from time to time. Executive shall
have access to Company-provided ground and air transportation including, without
limitation, helicopter flights between Hartford, Connecticut and New York, New
York.
(b) In addition to providing Executive with appropriate office
facilities and support at the Company's headquarters, which shall be Executive's
principal job location, the Company shall make available to Executive office
facilities and support in New York, N.Y.
ARTICLE 3
CERTAIN BENEFITS
SECTION 3.01. Certain Events. (a) A "QUALIFYING EVENT" means any of the
following events:
(i) The involuntary termination of Executive's employment by
the Company, other than (x) for Cause, or (y) by reason of Executive's
death or Disability; or
(ii) Executive's voluntary termination of employment for Good
Reason, provided that such termination occurs within 90 days after the
occurrence of any event constituting Good Reason.
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SECTION 3.02. Right to Certain Benefits. (a) In the event of any
termination of employment during the Employment Term, Executive shall be
entitled to receive from the Company either the Severance Benefits to the extent
and as described in Section 3.03 or the relevant Separation Benefits to the
extent and as described in Section 3.04, as the case may be.
(b) (i) In the event that a Change in Control occurs during the
Employment Term, subject to Article 4, the stock options and restricted stock
unit awards referred to in Section 2.03 above (collectively, "AWARDS") shall
become immediately vested, nonforfeitable and exercisable as of the date of the
Change in Control and shall remain exercisable until the earlier of (x) the
expiration date of such Award, any termination of employment notwithstanding,
and (y) in the event of any termination of Executive's employment with the
Company, the later of the first anniversary of the date of such termination and
the last date on which such Award would otherwise have been exercisable (such
earlier date, the "TERMINATION DATE").
(ii) In the event that a Qualifying Event occurs during the Employment
Term, (A) all Awards held by Executive shall become immediately vested,
nonforfeitable and exercisable as of the date of such Event and shall remain
exercisable until the Termination Date and (B) with respect to all other equity
based awards made to Executive during the Employment Term, Executive shall be
credited for vesting purposes with deemed service during the Continuation Period
(in the case of a Qualifying Event occurring during the 24 months following a
Change in Control) or the Payment Period, as the case may be, and such awards
shall remain exercisable for such period as shall be specified in the relevant
plan and/or award document.
(iii) Each party hereto shall give to the other party 30 days prior
written notice of such party's intent to terminate Executive's employment with
the Company.
SECTION 3.03. Benefits upon a Qualifying Event after a Change in
Control. Except to the extent provided in Article 4, Section 6.07 and Section
6.08, Executive shall be entitled to the following benefits (the "SEVERANCE
BENEFITS") upon a Qualifying Event within 24 months following a Change in
Control:
(a) The Company shall pay Executive as soon as practicable a lump sum,
in cash, equal to (i) Executive's earned but unpaid Base Salary and other vested
but unpaid cash entitlements for the period through and including the date of
termination of Executive's employment, including unused earned vacation pay and
unreimbursed documented business expenses (collectively, "ACCRUED COMPENSATION")
and (ii) an amount equal to the product of Executive's annual target bonus
opportunity for the year in which Executive's employment terminates (the "BASIC
BONUS AMOUNT") times a fraction, the numerator of which is the number of days in
such year through the date of termination and the denominator of which is 365
(the "PRO-RATA BONUS AMOUNT"). In addition, Executive shall be entitled to any
other vested benefits earned by Executive for
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the period through and including the date of termination of Executive's
employment under any other employee benefit plans and arrangements maintained by
the Company, in accordance with the terms of such plans and arrangements, except
as modified herein (collectively, "ACCRUED BENEFITS").
(b) The Company shall pay Executive as soon as practicable a lump sum
amount in cash equal to three times the sum of the amounts set forth in Clauses
(i) and (ii) below:
(i) Executive's Base Salary at its highest annual rate in
effect during the period beginning immediately prior to the date of the
Change in Control to which such Qualifying Event relates and ending on
the date of such Qualifying Event; and
(ii) the Executive's Basic Bonus Amount.
(c) In addition, Executive shall be entitled to the benefits set forth
below through and in respect of the period ending on the third anniversary of
the Qualifying Event (the "CONTINUATION PERIOD"):
(i) Continued participation in and service credit of one year
of service for each full year in the Continuation Period under the
Company's Medical Plans and other welfare benefits plans under the
terms thereof and hereof;
(ii) Payment of the Retention Amount, if not previously paid
to Executive; and,
(iii) Full vesting of the Pension Benefits, if any, and of the
Executive's previously accrued benefits under the Company's qualified
and non-qualified defined benefit and defined contribution plans (the
"RETIREMENT ACCRUALS").
SECTION 3.04. Separation Payments. Except to the extent provided in
Section 6.07 and Section 6.08, Executive shall be entitled to the benefits set
forth below (the "SEPARATION BENEFITS") upon termination of employment other
than as set forth in Section 3.03:
(a) Upon any such termination of employment other than by reason of
death or Disability, including Executive's voluntary termination of employment
with or without Good Reason or upon termination of Executive's employment with
or without Cause, Executive shall be entitled to:
(i) The Accrued Compensation; and
(ii) The Accrued Benefits.
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(b) Upon a Qualifying Event prior to or more than 24 months after a
Change in Control, the Company shall pay Executive:
(i) Cash compensation through the second anniversary of such
Qualifying Event (the "PAYMENT PERIOD") in equal installments during
the Payment Period in accordance with the applicable Company payroll
system, in an amount equal to two times the sum of (i) the Base Salary
as in effect at the time of such termination and (ii) the Basic Bonus
Amount;
(ii) The Pro-Rata Bonus Amount;
(iii) Continued participation in and service credit of one
year of service for each full year in the Payment Period under the
Company's Medical Plans and other welfare benefit plans during the
Payment Period;
(iv) Full vesting of the Retirement Accruals and service
credit for the Payment Period for purposes of calculating the Pension
Benefits, if any; and
(v) The Retention Amount, if not previously paid to Executive.
(c) Upon termination of Executive's employment by reason of death or
Disability, Executive shall be entitled to:
(i) The Accrued Compensation;
(ii) The Accrued Benefits; and
(iii) Full vesting of the Retirement Accruals.
SECTION 3.05. Non-Renewal Payments. In the event of the expiration of
the Employment Term on December 31, 2003 or 2004 as a result of the delivery of
the Company's notice of its intention not to extend the Employment Term pursuant
to Section 1.02, Executive shall be entitled to:
(a) The Accrued Compensation;
(b) The Accrued Benefits;
(c) A lump sum cash payment of $3,000,000 if such expiration shall
occur on December 31, 2003 or $1,500,000 if such expiration shall occur on
December 31, 2004; and
(d) Full vesting of the Pension Benefits, if any, and of the
Retirement Accruals.
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ARTICLE 4
CERTAIN TAX REIMBURSEMENT PAYMENTS
SECTION 4.01. Initial Determinations by Accounting Firm. In the event
that a Change in Control occurs or is expected to occur, the Company shall
retain a national accounting firm selected by the Company and reasonably
acceptable to Executive (the "ACCOUNTING FIRM") to perform the calculations
contemplated by this Article 4. The Accounting Firm shall have discretion to
retain an independent appraiser with adequate expertise (the "APPRAISER") to
provide any valuations necessary for the Accounting Firm's calculations
hereunder. The Company shall pay all the fees and costs associated with the work
performed by the Accounting Firm and any Appraiser retained by the Accounting
Firm. If the Accounting Firm has performed services for any person, entity or
group in connection with the Change in Control, Executive may select an
alternative national accounting firm to be the Accounting Firm. If the Appraiser
otherwise performs work for any of the entities involved in the Change in
Control or their affiliates (or has performed work for any such entity within
the three years preceding the calculations hereunder), then Executive may select
an alternative appraiser of national stature with adequate expertise to be the
Appraiser. The Accounting Firm shall provide promptly to both the Company and
Executive a written report setting forth the calculations required under this
Agreement, together with a detail of all relevant supportive data, valuations
and calculations. All determinations of the Accounting Firm shall be binding on
Executive and the Company. When making the calculations required hereunder,
Executive shall be deemed to pay: (x) Federal income taxes at the highest
applicable marginal rate of Federal income taxation for the taxable year for
which any such calculation is made; and (y) any applicable state and local
income taxes at the highest applicable marginal rate of taxation for the taxable
year for which any such calculation is made, net of the maximum reduction in
Federal income taxes which could be obtained from deduction of such state and
local taxes.
The Accounting Firm shall determine (the "INITIAL DETERMINATION"):
(a) the aggregate amount of all payments, benefits and distributions
provided to Executive or for Executive's benefit, whether paid or payable or
distributed or distributable pursuant to the terms of the Agreement or any other
agreement, plan or arrangement of the Company or otherwise (other than any
payment pursuant to this Article 4) which are in the nature of compensation and
contingent upon a Change in Control (valued pursuant to Section 280G of the
Code) (collectively the "PAYMENTS"); and
(b) the maximum amount of the Payments Executive would be entitled to
receive without being subject to the excise tax imposed by Section 4999 of the
Code (the "PAYMENT CAP") (such excise tax, together with any interest or
penalties with respect to such excise tax, are hereinafter collectively referred
to as the "EXCISE TAX").
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SECTION 4.02. Initial Treatment of Payments.
(a) If the amount of the Payments does not exceed the Payment Cap,
Executive shall be entitled to receive the full amount of the Payments.
(b) If the amount of the Payments exceeds the Payment Cap by less than
5% of the Payment Cap amount, then, notwithstanding anything to the contrary,
the amount of the Payments payable to Executive shall be reduced to the amount
of the Payment Cap. In the event that the Payments are subject to reduction
hereunder, Executive shall have the right to designate which of the Payments
will be reduced or eliminated.
(c) If the amount of the Payments exceeds the Payment Cap by 5% or
more of the Payment Cap amount, then the amount of the Payments Executive is
entitled to receive shall not be reduced and the Company shall pay to Executive
an additional payment (a "GROSS-UP PAYMENT") in an amount such that after
payment by Executive of all taxes (including any interest and penalties imposed
with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up
Payment Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments. All determinations required to be made as to
whether a Gross-Up Payment is required and the amount of such Gross-Up Payment
shall be made by the Accounting Firm.
SECTION 4.03. Redeterminations Based on IRS or Court Ruling. If after
the date of the Initial Determination (A) Executive becomes entitled to receive
additional Payments (including, without limitation, severance) contingent upon
the same Change in Control, or (B) Executive becomes subject to the terms of any
final binding agreement between Executive and the Internal Revenue Service or
any decision of a court of competent jurisdiction which is not appealable or for
which the time to appeal has lapsed (a "FINAL DETERMINATION") and which is
contrary the Initial Determination, then based upon such additional Payments or
such Final Determination (as the case may be), the Accounting Firm shall
recalculate: (i) the aggregate Payments (such recalculated amount, the
"REDETERMINED PAYMENTS"); and (ii) the maximum amount of the Redetermined
Payments Executive would be entitled to receive without being subject to the
excise tax imposed by Section 4999 of the Code (the "REDETERMINED PAYMENT CAP")
(such excise tax, together with any interest or penalties with respect to such
excise tax, are hereinafter referred to as the "REDETERMINED EXCISE TAX").
SECTION 4.04. Reconciliations Based on Redeterminations.
(a) If the Redetermined Payment Cap is greater than the Payment Cap
(and Executive's Payments were reduced pursuant to Section 4.02(b)), then the
Company shall promptly pay Executive the amount by which the Redetermined
Payment Cap exceeds the Payment Cap, together with interest on such difference
at the applicable Federal rate (as
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defined in Section 1274(d) of the Code)(the "FEDERAL RATE") from the original
Payment due date to the date of actual payment of the difference by the Company.
(b) If the aggregate value of the Redetermined Payments exceeds the
Redetermined Payment Cap by less than 5%, then, notwithstanding anything to the
contrary, the amount of the Redetermined Payments that Executive is entitled to
receive and retain shall be reduced to the amount of the Redetermined Payment
Cap. In the event that the Redetermined Payments are subject to reduction under
this paragraph and any such portion of the Redetermined Payments have not yet
been paid to Executive, Executive shall have the right to designate which
portion of such unpaid Redetermined Payments should be reduced or eliminated. If
Executive has previously received any Payments in excess of the Redetermined
Payment Cap, such excess Payments shall be deemed for all purposes to be a loan
to Executive made on the date of receipt of such excess Payments, which
Executive shall have an obligation to repay to the Company on demand, together
with interest on such amount at the applicable Federal rate (as defined in
Section 1274(d) of the Code) from the date of Executive's receipt of such excess
Payments to the date of repayment by Executive. Notwithstanding the foregoing,
if any portion of such excess Payments which is to be refunded to the Company
has been paid to any Federal, state or local tax authority, repayment thereof
shall not be required until actual refund or credit of such portion has been
made to Executive, and interest payable to the Company shall not exceed interest
received or credited to Executive by such tax authority for the period it held
such portion. In addition, if, pursuant to a Final Determination, any such
excess Payments are not deemed a loan and as a result Executive is subject to
Redetermined Excise Tax, then Executive shall be treated as if the aggregate
value of the Redetermined Payments exceeds the Redetermined Payment Cap by more
than 5% under Section 4.04(c) and Executive shall be entitled to the
Supplemental Gross-Up Payment, subject to all the attendant conditions set forth
below.
(c) If the aggregate value of the Redetermined Payments exceeds the
Redetermined Payment Cap by more than 5%, then the amount of the Redetermined
Payments Executive is entitled to receive and retain shall not be reduced and
the Company shall pay to Executive an additional payment (a "SUPPLEMENTAL
GROSS-UP PAYMENT") in an amount such that after payment by Executive of all
taxes (including any interest and penalties imposed with respect to such taxes),
including any Redetermined Excise Tax, imposed on the Supplemental Gross-Up
Payment Executive retains an amount of the Supplemental Gross-Up Payment equal
to the Redetermined Excise Tax imposed upon the Redetermined Payments; provided
that if Executive has previously received a Gross-Up Payment, the amount of the
Supplemental Gross-Up Payment shall be reduced by the amount of the Gross-Up
Payment Executive previously received, so that Executive will be fully
reimbursed, but will not receive duplicative reimbursements. If, however, the
Excise Tax exceeds the Redetermined Excise Tax, the excess Gross-Up Payment that
has been paid to Executive shall be deemed for all purposes to be a loan to
Executive made on the date of receipt of such excess Gross-Up Payment, which
Executive shall have an obligation to repay to the Company on demand, together
with
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interest on such amount at the applicable Federal rate (as defined in Section
1274(d) of the Code) from the date of Executive's receipt of such excess
Gross-Up Payment to the date of repayment by Executive. Notwithstanding the
foregoing, in the event any portion of the Gross-Up Payment to be refunded to
the Company has been paid to any Federal, state or local tax authority,
repayment thereof shall not be required until actual refund or credit of such
portion has been made to Executive, and interest payable to the Company shall
not exceed interest received or credited to Executive by such tax authority for
the period it held such portion. Executive and the Company shall mutually agree
upon the course of action to be pursued (and the method of allocating the
expenses thereof) if Executive's good faith claim for refund or credit is
denied.
SECTION 4.05. Procedures with Respect to IRS Claims.
(a) Executive shall notify the Company in writing of any claim by the
Internal Revenue Service relating to any unpaid excise tax applicable to the
Payments. Such notification shall be given as soon as practicable but no later
than twenty business days after Executive knows of such claim and shall apprise
the Company of the nature of such claim, any assessment under such claim and the
date on which such assessment is requested to be paid. Executive shall not pay
such claim prior to the expiration of the thirty day period following the date
on which Executive gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
(b) If the Company notifies Executive in writing prior to the
expiration of such period that it desires to contest such claim, Executive
shall:
(i) give the Company any information reasonably requested by
the Company relating to such claim,
(ii) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax, Redetermined Excise Tax or income tax,
including interest and penalties with respect thereto, imposed as a result of
such representation and payment of costs and expenses.
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Without limitation on the foregoing, the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at its sole option,
either direct Executive to pay the tax claimed and xxx for a refund or contest
the claim in any permissible manner, and Executive agree to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs Executive to pay such
claim and xxx for a refund, the Company shall advance the amount of such payment
to Executive, on an interest-free basis, and shall indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax, Redetermined Excise Tax or
income tax, including interest and penalties with respect thereto, imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the statue of
limitations relating to payment of taxes for the taxable year of Executive with
respect to which such contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Company's control of the contest shall
be limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other taxing
authority.
(c) If after the receipt by Executive of an amount advanced by the
Company pursuant to the foregoing, Executive becomes entitled to receive any
refund with respect to such claim, Executive shall (subject to the Company's
complying with the requirements of above with respect to any contest of an
excise tax claim) promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon by the taxing authority
after deducting any taxes applicable thereto). If, after the receipt by
Executive of an amount advanced by the Company hereunder, a determination is
made that Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify Executive in writing of its intent to
contest such denial of refund prior to the expiration of thirty days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of the Supplemental Gross-Up Payment required to be paid hereunder.
The forgiveness of such advance shall be considered part of the Supplemental
Gross-Up Payment and subject to gross-up for any taxes (including interest or
penalties) associated therewith.
ARTICLE 5
SUCCESSORS AND ASSIGNMENTS
SECTION 5.01. Successors. Except as provided in Section 5.03, the
Company will require any successor (whether by reason of a Change in Control,
direct or indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform the obligations
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under this Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession had taken place.
SECTION 5.02. Assignment by Executive. This Agreement shall inure to
the benefit of and be enforceable by Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees. If Executive should die or become disabled while any
amount is owed but unpaid to Executive hereunder, all such amounts, unless
otherwise provided herein, shall be paid to Executive's devisee, legatee, legal
guardian or other designee, or if there is no such designee, to Executive's
estate. Executive's rights hereunder shall not otherwise be assignable.
SECTION 5.03. Completion. Upon Completion, all undertakings by the
Company hereunder shall cease to be obligations of Aetna Inc., a Connecticut
corporation, and shall become obligations of Aetna U.S. Healthcare Inc., a
Pennsylvania corporation (which is to be renamed Aetna Inc.), and its
Subsidiaries and Executive shall have no right to bring any claim or action
hereunder against ING America Insurance Holdings, Inc. or any of its
Subsidiaries or Affiliates.
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Notices. Any notice required to be delivered hereunder
shall be in writing and shall be addressed
if to the Company, to:
Aetna Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
Attn: General Counsel;
Copies to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxxx X. Xxxxx
if to Executive, to Executive's last known address as reflected on the
books and records of the Company
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or such other address as such party may hereafter specify for the purpose by
written notice to the other party hereto. Any such notice shall be deemed
received on the date of receipt by the recipient thereof if received prior to
5:00 p.m. in the place of receipt and such day is a business day in the place of
receipt. Otherwise, any such notice shall be deemed not to have been received
until the next succeeding business day in the place of receipt.
SECTION 6.02. Legal Fees and Expenses. The Company shall pay all legal
fees, costs of litigation, prejudgment interest, and other expenses which are
reasonably incurred by Executive as a result of any conflict between the parties
pertaining to this Agreement which arises within the 24 month period following a
Change in Control or in connection with the termination of Executive's
employment during such period.
SECTION 6.03. Arbitration. Except as provided in Section 6.16,
Executive shall have the right and option to elect (in lieu of litigation) to
have any dispute or controversy arising under or in connection with this
Agreement settled by arbitration, conducted before a panel of three arbitrators
sitting in a location selected by Executive within 50 miles from the location of
Executive's principal place of employment with the Company, in accordance with
the rules of the American Arbitration Association then in effect. Executive's
election to arbitrate, as herein provided, and the decision of the arbitrators
in that proceeding, shall be binding on the Company and Executive. Judgment may
be entered on the award of the arbitrator in any court having jurisdiction.
Except as provided in Section 6.02, each party shall pay its own expenses of
such arbitration and all common expenses of such arbitration shall be borne
equally by Executive and the Company.
SECTION 6.04. Unfunded Agreement. The obligations of the Company under
this Agreement represent an unsecured, unfunded promise to pay benefits to
Executive and/or Executive's beneficiaries, and shall not entitle Executive or
such beneficiaries to a preferential claim to any asset of the Company.
SECTION 6.05. Non-Exclusivity of Benefits. Unless specifically provided
herein, neither the provisions of this Agreement nor the benefits provided
hereunder shall reduce any amounts otherwise payable, or in any way diminish
Executive's rights as an employee of the Company, whether existing now or
hereafter, under any compensation and/or benefit plans (qualified or
nonqualified), programs, policies, or practices provided by the Company, for
which Executive may qualify; provided, however, that the Separation Benefits and
the Severance Benefits shall be in lieu of any severance benefits under any such
plans, programs, policies or practices. Vested benefits or other amounts which
Executive is otherwise entitled to receive under any plan, policy, practice, or
program of the Company (i.e., including, but not limited to, vested benefits
under any qualified or nonqualified retirement plan), at or subsequent to the
date of termination of Executive's employment shall be payable in accordance
with such plan, policy, practice, or program except as expressly modified by
this Agreement.
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SECTION 6.06. Employment Status. Nothing herein contained shall
interfere with the Company's right to terminate Executive's employment with the
Company at any time, with or without Cause, subject to the Company's obligation
to provide Severance Benefits or Separation Benefits, if any. Executive shall
also have the right to terminate his employment with the Company at any time
without liability, subject only to his obligations hereunder.
SECTION 6.07. Mitigation. (a) In no event shall Executive be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to Executive under any of the provisions of this Agreement nor,
except as provided below, shall the amount of any payment or benefit hereunder
be reduced by any compensation earned by Executive as a result of employment by
another employer.
(b) In the event that, during a Continuation Period or Payment Period,
as the case may be, Executive becomes eligible for health or other welfare
benefits from a new employer which are comparable to and of substantially
equivalent value to Executive's benefits under the Company's Medical Plans or
other welfare plans, Executive's benefits hereunder shall be appropriately
reduced or terminated, in the Company's sole discretion, to the extent of such
comparable benefits available to Executive.
SECTION 6.08. Entire Agreement. This Agreement represents the entire
agreement between Executive and the Company and its affiliates with respect to
Executive's employment and/or severance rights, and supersedes all prior
discussions, negotiations, and agreements concerning such rights; provided,
however, that any amounts payable to Executive hereunder shall be reduced by any
amounts paid to Executive as required by any applicable local law in connection
with any termination of Executive's employment.
SECTION 6.09. Tax Withholding. Notwithstanding anything in this
Agreement to the contrary, the Company shall withhold from any amounts payable
under this Agreement all federal, state, city, or other taxes as are legally
required to be withheld.
SECTION 6.10. Waiver of Rights. The waiver by either party of a breach
of any provision of this Agreement shall not operate or be construed as a
continuing waiver or as a consent to or waiver of any subsequent breach hereof.
SECTION 6.11. Severability. In the event any provision of the Agreement
shall be held illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of the Agreement, and the Agreement shall
be construed and enforced as if the illegal or invalid provision had not been
included.
SECTION 6.12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Connecticut without
reference to principles of conflict of laws.
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SECTION 6.13. Counterparts. This Agreement may be signed in several
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were on the same instrument.
SECTION 6.14. Indemnification. The Company shall indemnify Executive
(and Executive's legal representatives or other successors) to the fullest
extent permitted by the Certificate of Incorporation and By-Laws of the Company,
as in effect at such time or on the Effective Date, and Executive shall be
entitled to the protection of any insurance policies the Company may elect to
maintain generally for the benefit of its directors and officers (and to the
extent the Company maintains such an insurance policy or policies, Executive
shall be covered by such policy or policies, in accordance with its or their
terms, to the maximum extent of the coverage available for any Company officer
or director), against all costs, charges and expenses whatsoever incurred or
sustained by Executive or Executive's legal representatives at the time such
costs, charges and expenses are incurred or sustained, in connection with any
action, suit or proceeding to which Executive (or Executive's legal
representatives or other successors) may be made a party by reason of
Executive's being or having been a director, officer or employee of the Company,
or any Subsidiary or Executive's serving or having served any other enterprise
as a director, officer, employee or fiduciary at the request of the Company.
SECTION 6.15. Nondisclosure, Nonsolicitation, Noncompete, and
Nondisparagement.
(a) (i) Executive shall not (except to the extent required by an order
of a court having competent jurisdiction or under subpoena from an appropriate
government agency) disclose to any third person, whether during or subsequent to
the Executive's employment with the Company, any trade secrets; customer lists;
provider lists; product development and related information; marketing plans and
related information; sales plans and related information; premium on any other
pricing information; operating policies and manuals; research; payment rates;
methodologies; contractual forms; business plans; financial records; or other
financial, commercial, business or technical information related to the Company
or any Subsidiary or Affiliate unless such information has been previously
disclosed to the public by the Company or has become public knowledge other than
by a breach of this Agreement; provided, however, that this limitation shall not
apply to any such disclosure made while the Executive is employed by the
Company, any Subsidiary or Affiliate if such disclosure occurred in connection
with the performance of Executive's job as an employee of the Company, any
Subsidiary or Affiliate;
(ii) Executive agrees that upon termination of his employment
with the Company for any reason, he will return to the Company immediately all
memoranda, books, papers, plans, information, letters and other data, and all
copies thereof or therefrom, in any way relating to the business of the Company
and its Affiliates. Executive further agrees that he will not retain or use for
his account at any time any trade
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names, trademark or other proprietary business designation used or owned in
connection with the business of the Company or its Affiliates.
(b) (i) While employed by the Company and for two years after the
termination of the Employment Term, the Executive shall not, directly or
indirectly, induce or attempt to induce any employee of the Company, any
Subsidiary or any Affiliate to be employed or perform services elsewhere;
(ii) While employed by the Company and for two years after the
termination of the Employment Term, the Executive shall not, directly or
indirectly, induce or attempt to induce any agent or agency, broker,
broker-dealer, financial supplier, registered principal or representative,
supplier or health care provider of the Company, any Subsidiary or Affiliate to
cease or curtail providing services to the Company, any Subsidiary or Affiliate;
(iii) While employed by the Company and for two years after the
termination of the Employment Term, unless the termination of Executive's
employment occurs during the 24 month period following a Change in Control, the
Executive shall not, directly or indirectly, solicit or attempt to solicit the
trade of any individual or entity which, at the time of such solicitation, is a
customer of the Company, any Subsidiary or Affiliate, or which the Company, any
Subsidiary or Affiliate is undertaking reasonable steps to procure as a customer
at the time of or immediately preceding termination of employment; provided,
however, that this limitation shall only apply to any product or service which
is in competition with a product or service of the Company, any Subsidiary or
Affiliate;
(c) (i) While employed by the Company and for one year after the
termination of the Employment Term, unless the termination of Executive's
employment occurs during the 24 month period following a Change in Control, the
Executive shall not, directly or indirectly, (x) engage in the ownership of
(except less than 1% of the outstanding capital stock of any publicly traded
company), (y) become an employee of or (z) act as a consultant or contractor to,
any Competitor (as defined below);
(ii) Following the termination of the Executive's employment with the
Company, the Executive shall provide assistance to and shall cooperate with the
Company or a Subsidiary or Affiliate, upon its reasonable request and without
additional compensation, with respect to matters within the scope of the
Executive's duties and responsibilities during employment, provided that any
reasonable out-of-pocket expenses incurred in connection with any assistance
Executive has been requested to provide under this provision for items
including, but not limited to transportation, meals, lodging and telephone,
shall be reimbursed by the Company. The Company agrees and acknowledges that it
shall, to the maximum extent possible under the then prevailing circumstances,
coordinate or cause a Subsidiary or Affiliate to coordinate any such request
with the Executive's other commitments and responsibilities to minimize the
degree to which such request interferes with such commitments and
responsibilities.
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For purposes of Section 6.15(c)(i), a "COMPETITOR" is any company or
organization that (x) if Executive becomes Chief Executive Officer of the
Company prior to Completion, is a direct and substantial competitor of the
Company in its financial services and international businesses or (y) develops,
administers, operates, offers or solicits offers regarding managed care, health,
life, long-term care or disability coverages, networks, insurance or plans to
employers, employees or individuals; and does not include any hospital, private
medical practice or academic institution that does not own a controlling or
material interest in and does not operate (directly or indirectly), and is not
otherwise an affiliate of, a health insurance company, a managed care company or
a health benefit plan (including an HMO, POS or PPO plan).
(d) Neither party will at any time (whether during or after
termination of Executive's employment with the Company) knowingly make any
statement, written or oral, or take any other action relating to the other party
that would disparage or otherwise harm such party, its business or his
reputation or, in the case of the Company, the reputation of any of its officers
and directors.
SECTION 6.16. Material Inducement; Specific Performance.
(a) If any provision of Section 6.15 is determined by a court of
competent jurisdiction not to be enforceable in the manner set forth in this
Agreement, the Company and Executive agree that it is the intention of the
parties that such provision should be enforceable to the maximum extent possible
under applicable law and that such court shall reform such provision to make it
enforceable in accordance with the intent of the parties.
(b) Executive acknowledges that a material part of the inducement for
the Company to provide the salary and benefits evidenced hereby is Executive's
covenants set forth in Section 6.15 and that the covenants and obligations of
Executive with respect to nondisclosure and nonsolicitation relate to special,
unique and extraordinary matters and that a violation of any of the terms of
such covenants and obligations will cause the Company irreparable injury for
which adequate remedies are not available at law. Therefore, Executive agrees
that, if Executive shall materially breach any of those covenants following
termination of employment, the Company shall be entitled to an injunction,
restraining order or such other equitable relief (without the requirement to
post a bond) restraining Executive from committing any violation of the
covenants and obligations contained in Section 6.15 and the Company shall have
no further obligation to pay Executive any benefits otherwise payable hereunder,
other than any such breach which occurs during the 24 month period following a
Change in Control or following the termination of Executive's employment during
such period. The remedies in the preceding sentence are cumulative and are in
addition to any other rights and remedies the Company may have at law or in
equity as an arbitrator (or court) shall reasonably determine.
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ARTICLE 7
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings set forth below.
"Accounting Firm" has the meaning accorded such term in Section 4.01.
"Accrued Benefits" has the meaning accorded such term in Section 3.03.
"Accrued Compensation" has the meaning accorded such term in Section
3.03.
"Affiliate" and "Associate" have the respective meanings accorded to
such terms in Rule 12b-2 under the Exchange Act as in effect on the Effective
Date.
"Agreement" has the meaning accorded such term in the introductory
paragraph of this Agreement.
"Appraiser" has the meaning accorded such form in Section 4.01.
"Awards" has the meaning accorded such term in Section 3.02.
"Base Salary" has the meaning accorded such term in Section 2.01.
"Basic Bonus Amount" has the meaning accorded such term in Section
3.03.
"Basic Options" has the meaning accorded such term in Section 2.03.
"Beneficial Ownership." A Person shall be deemed the "Beneficial
Owner"of, and shall be deemed to "beneficially own," securities pursuant to Rule
13d-3 under the Exchange Act as in effect on the Effective Date.
"Board" means, prior to Completion, the Board of Directors of Aetna
Inc. (a Connecticut corporation) and, following Completion, the Board of
Directors of Aetna Inc. (a Pennsylvania corporation).
"Cause" means the occurrence of any one or more of the following:
(a) Executive's willful and continued failure substantially to perform
the duties of his position (other than as a result of incapacity due to physical
or mental illness) which failure is not remedied within fifteen business days of
written notice from the Company;
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(b) Executive's gross negligence or willful malfeasance in the
performance of Executive's duties hereunder; or
(c) Executive's commission of an act constituting fraud, embezzlement,
or any other act constituting a felony.
For purposes of this definition, no act or failure to act shall be
deemed "willful" unless effected by Executive not in good faith and without
reasonable belief that such action or failure to act was in the best interests
of the Company.
"Change in Control" means, and shall be deemed to have occurred upon
any occurrence of any of the following events:
(a) When any "person" as defined in Section 3(a)(9) of the Exchange Act
and as used in Section 13(d) and 14(d) thereof, including a "group" as defined
in Section 13(d) of the Exchange Act but excluding the Company and any
Subsidiary thereof and any employee benefit plan sponsored or maintained by the
Company or any Subsidiary (including any trustee of such plan acting as
trustee), directly or indirectly, becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act, as amended from time to time), of securities
of the Company representing 20 percent or more of the combined voting power of
the Company's then outstanding securities;
(b) When, during any period of 24 consecutive months the individuals
who, at the beginning of such period, constitute the Broad (the "Incumbent
Directors") cease for any reason other than death to constitute at least
majority thereof, provided that a Director who was not a Director at the
beginning of such 24-month period shall be deemed to have satisfied such
24-month requirement (and be an Incumbent Director) if such Director was elected
by, or on the recommendation of or with the approval of, at least two-thirds of
the Directors who then qualified as Incumbent Directors either actually (because
they were directors at the beginning of such 24-month period) or by prior
operation of this paragraph (b); or
(c) The occurrence of a transaction requiring stockholder approval for
the acquisition of the Company by an entity other than the Company or a
Subsidiary through purchase of assets, or by merger, or otherwise.
Notwithstanding the foregoing, in no event shall a "Change in Control"
be deemed to have occurred (i) as a result of the formation of a Holding
Company, (ii) with respect to Executive, if Executive is part of a "group,"
within the meaning of Section 13(d)(3) of the Exchange Act as in effect on the
Effective Date, which consummates the Change in Control transaction, or (iii) as
a result of the Completion. In addition, for purposes of the definition of
"Change in Control" a Person engaged in business as an underwriter of securities
shall not be deemed to be the "Beneficial Owner" of, or to "beneficially own,"
any securities acquired through such Person's participation in good
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faith in a firm commitment underwriting until the expiration of forty days after
the date of such acquisition.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" has the meaning accorded such term in Section 2.01.
"Company" means, prior to Completion, Aetna Inc. (a Connecticut
corporation) and, following Completion, Aetna Inc. (a Pennsylvania corporation)
which is the renamed successor to Aetna U.S. Healthcare Inc.
"Completion" has the meaning accorded such term in the second "Whereas"
clause of this Agreement.
"Continuation Period" has the meaning accorded to such term in Section
3.03.
"Disability" means Long-Term Disability, as such term is defined in the
Disability Plan.
"Disability Plan" means the long-term disability plan (or any successor
disability and/or survivorship plan adopted by the Company) in which Executive
participates, as in effect immediately prior to the relevant event (subject to
changes in coverage levels applicable to all employees generally covered by such
Plan).
"Effective Date" has the meaning accorded such term in Section 1.01.
"Employment Term" has the meaning accorded such term in Section 1.02.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excise Tax" has the meaning accorded such term in Section 4.01.
"Executive" has the meaning accorded such term in the introductory
paragraph of this Agreement.
"Final Determination" has the meaning accorded such term in Section
4.03.
"Good Reason" means, without Executive's express written consent, the
occurrence of any one or more of the following:
(a) Executive's failure to be appointed or elected to, removal from,
or failure to be reappointed or reelected to, the positions as specified in
Article 1;
(b) Any change in Executive's reporting responsibilities, the
assignment to Executive of duties materially inconsistent with Executive's
status, or a material
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reduction or alteration in the nature thereof, in each case excluding any
designated acting or temporary authorities, responsibilities and status;
provided, however, that, other than during the 24 months following a Change in
Control, any insubstantial or inadvertent act that is remedied by the Company
promptly after receipt of notice thereof given by Executive shall not constitute
Good Reason;
(c) A reduction by the Company of Executive's Base Salary or total
annual target compensation from the level in effect immediately prior thereto;
(d) Any failure of a successor of the Company to assume and agree to
perform the Company's entire obligations under this Agreement, as required by
Section 5.01 herein, provided that such successor has received at least ten days
written notice from the Company or Executive of the requirements of Section
5.01; or
(e) The Company's requiring Executive without his consent to be based
at a location in excess of [75] miles from Executive's principal job location
immediately prior thereto; except for required travel on the Company's business
to an extent consistent with Executive's business travel obligations immediately
prior thereto;
"Gross-Up Payment" has the meaning accorded such term in Section 4.02.
"Health Care Business" has the meaning accorded such term in the second
whereas clause.
"Holding Company" means an entity that becomes a holding company for
the Company or its businesses as a part of any reorganization, merger,
consolidation or other transaction, provided that the outstanding shares of
common stock of such entity and the combined voting power of the then
outstanding voting securities of such entity entitled to vote generally in the
election of directors is, immediately after such reorganization, merger,
consolidation or other transaction, beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the voting stock outstanding immediately
prior to such reorganization, merger, consolidation or other transaction in
substantially the same proportions as their ownership, immediately prior to such
reorganization, merger, consolidation or other transaction, of such outstanding
voting stock.
"Initial Determination" has the meaning accorded such term in Section
4.01.
"Medical Plans" means the medical care plans (or any successor medical
plans adopted by the Company) in which Executive participates, as in effect
immediately prior to the relevant event (subject to changes in coverage levels
applicable to all employees generally covered by such Plans).
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"Merger Agreement" means the Agreement and Plan of Restructuring and
Merger among ING America Insurance Holdings, Inc., ANB Acquisition Corp., Aetna
Inc. and, for limited purposes only, ING Groep N.V., dated as of July 19, 2000.
"Payment Cap" has the meaning accorded such term in Section 4.01.
"Payment Period" has the meaning accorded such term in Section 3.04.
"Payments" has the meaning accorded such term in Section 4.01.
"Pension Benefits" has the meaning accorded such term in Section 2.05.
"Person" means an individual, corporation, partnership, association,
trust or any other entity or organization.
"Premium Options" has the meaning accorded such term in Section 2.03.
"Pro-Rata Bonus Amount" has the meaning accorded such term in Section
3.03.
"Provisions" has the meaning accorded such term in Section 2.03
"Public Company" means the Company, having become an independent
publicly traded corporation with a class of equity securities registered under
Section 12 of the Exchange Act.
"Qualifying Event" has the meaning accorded such term in Section 3.01.
"Redetermined Excise Tax" has the meaning accorded such term in Section
4.03.
"Redetermined Payments" has the meaning accorded such term in Section
4.03.
"Redetermined Payment Cap" has the meaning accorded such term in
Section 4.03.
"Retention Amount" has the meaning accorded such term in Section 2.02.
"Retirement Accruals" has the meaning accorded such term in Section
3.03.
"Second Tranche" has the meaning accorded such term in Section 2.03.
"Separation Benefits" has the meaning accorded such term in Section
3.04.
"Severance Benefits" has the meaning accorded such term in Section
3.03.
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"Subsidiary" of any Person means any other Person of which securities
or other ownership interests having voting power to elect a majority of the
board of directors or other Persons performing similar functions are at the time
directly or indirectly owned by such Person.
"Supplemental Gross-up Payment" has the meaning accorded such term in
Section 4.04.
"Termination Date" has the meaning accorded such term in Section 3.02.
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IN WITNESS WHEREOF, the Company and Executive have executed this
Agreement, to be effective as of the day and year first written above.
XXXX X. XXXX, M.D. AETNA INC.
/s/ Xxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President,
Corporate Human Resources
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