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EMPLOYMENT AGREEMENT
____________________
EMPLOYMENT AGREEMENT, dated as of December 19, 1995, by
and between Aetna Life and Casualty Company, a Connecticut
corporation (the "Company"), and Xxxxxx X. Xxxxxxx ("Executive").
W I T N E S S E T H:
_ _ _ _ _ _ _ _ _ _
WHEREAS, the Company is considering certain restructuring
alternatives that could result in significant changes in the
structure of its business, including, without limitation, dividing
the business of the Company into two or more separate publicly
traded companies or otherwise transferring a portion of the
business to a third party;
WHEREAS, the Company believes that Executive is a key
employee and that it is in the Company's best interests to retain
the services of Executive for the period during which such
restructuring alternatives are considered and, to the extent
applicable, implemented;
WHEREAS, the Company therefore desires to retain the
services of Executive and to enter into an agreement embodying the
terms of such employment (the "Agreement"); and
WHEREAS, Executive desires to accept such employment and
enter into such Agreement;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the Company and Executive hereby agree as
follows:
1. Employment. Except as provided in Paragraph 6(a), the
__________
Company shall continue to employ Executive and Executive agrees to
remain employed by the Company under the terms of this Agreement
for the period commencing on the date first written above and
ending April 28, 1998. The period during which Executive is
employed pursuant to this Agreement shall be referred to as the
"Contract Employment Period". Upon the expiration of the Contract
Employment Period, Executive's employment with the Company shall
continue on an at-will basis.
2. Position and Duties. During the contract Employment
___________________
Period, Executive shall serve as Executive Vice President,
Investments/Financial Services, of the Company and in such other
comparable or better position or positions with the Company and
its subsidiaries as the Chief Executive Officer or the Board of
Directors of the Company (the "Board") shall specify from time to
time. During the Contract Employment Period, Executive shall have
the duties, responsibilities and obligations customarily assigned
to individuals serving
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in the position or positions in which Executive serves hereunder
and such other duties, responsibilities and obligations as the
Chief Executive Officer or the Board shall from time to time
specify. Executive shall devote his full business time to the
services required of him hereunder, except for vacation time and
reasonable periods of absence due to sickness, personal injury or
other disability, and shall use his best efforts, judgment, skill
and energy to perform such services in a manner consistent with
the duties of his position and to improve and advance the business
and interests of the Company and its subsidiaries. Nothing
contained herein shall preclude Executive from (i) serving on any
_
corporate or governmental board of directors on which he currently
serves or, if the Board consents to such service, on any other
board of directors, (ii) serving on the board of, or working for,
__
any charitable, not-for profit or community organization, (iii)
___
pursuing any other activity to which the Board consents or (iv)
__
pursuing his personal, financial and legal affairs, so long as
such activities, individually or collectively, do not interfere
with the performance of Executive's duties hereunder.
3. Cash Compensation.
_________________
a. Base Salary. During the Contract Employment Period,
___________
the Company shall pay Executive a base salary at the annual rate
of $525,000. The Board shall periodically review Executive's base
salary and the Company may, in its discretion, increase such base
salary by an amount it determines to be appropriate. Any such
increase shall not reduce or limit any other obligation of the
Company hereunder. Executive's annual base salary payable
hereunder, as it may be increased from time to time and without
reduction for any amounts deferred as described above, is referred
to herein as "Base Salary". Executive's Base Salary, as in effect
from time to time, may not be reduced by the Company without
Executive's consent, provided that the Base Salary payable under
________ ____
this paragraph shall be reduced to the extent Executive elects to
defer or reduce such salary under the terms of any deferred
compensation or savings plan or other employee benefit arrangement
maintained or established by the Company. The Company shall pay
Executive the portion of his Base Salary not deferred in
accordance with its customary periodic payroll practices.
b. Incentive Compensation. During the term of the
______________________
Contract Employment Period, Executive shall remain eligible for
participation in the Company's existing and future annual and long
term incentive compensation programs at a level consistent with
his position at the Company and the Company's then current
policies and practices; provided that following any assignment of
_____________
this Agreement in accordance with the provisions of Paragraph 9(c)
or a Change in Control of the Company (as defined in Paragraph
7(e)), the calculation of the amount payable as annual incentive
compensation and the conditions upon which such bonus shall be
payable shall be no less favorable to the Executive (taking into
account reasonable changes in the Company's goals and objectives)
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than the annual bonus opportunity that had been made available to
the Executive for the fiscal year ended immediately prior to such
assignment or Change in Control. Without limiting the generality
of the foregoing, for each calendar year ending during the term
hereof, Executive shall receive the opportunity to receive an
annual bonus of at least 60% of his Base Salary (the "Minimum
Bonus Percentage"), subject to satisfaction of such reasonable
performance criteria as shall be established with respect to such
year.
4. Stock Option Grant. Contingent upon the execution of
__________________
this Agreement by the Executive, the Company has granted Executive
an option, having a ten-year term, to purchase 65,000 shares of
the Company's Common Stock at an exercise price per share equal to
$57 a share (the "Option"). Except to the extent specified below,
the terms of the Option shall be determined in accordance with the
terms of the 1994 Stock Incentive Plan (the "1994 Plan") and shall
be set forth in the separate agreement embodying the grant of such
Option (the "Option Agreement"), the form of which is attached
hereto as Exhibit A.
5. Benefits, Perquisites and Expenses.
__________________________________
a. Benefits. During the Contract Employment Period,
________
Executive shall be eligible to participate in (i) each welfare
_
benefit plan sponsored or maintained by the Company, including,
without limitation, each group life, hospitalization, medical,
dental, health, accident or disability insurance or similar plan
or program of the Company, and (ii) each pension, profit sharing,
__
retirement, deferred compensation or savings plan sponsored or
maintained by the Company, in each case, whether now existing or
established hereafter, to the extent that Executive is eligible to
participate in any such plan under the generally applicable
provisions thereof. Nothing in this Paragraph 5(a) shall be
construed to limit the ability of the Company to amend or
terminate any particular plan, program or arrangements, provided
_________
that, following the occurrence of a Change in Control (as defined
____
in Paragraph 7(e)) or the assignment of this Agreement to a New
Entity (as defined in Paragraph 6(a)) pursuant to Paragraph 9(b),
the benefits made available to the Executive thereafter shall be
at least substantially comparable, in the aggregate, to the
benefits made available to the Executive immediately prior to such
Change in Control or assignment.
With respect to the pension or retirement benefits payable to
Executive, Executive's service credited for purposes of
determining Executive's benefits and vesting shall be determined
in accordance with the terms of the applicable plan or program or,
if applicable, pursuant to any written agreement between Executive
and the Company (whether now existing or hereafter adopted) that
provides Executive a more favorable method of crediting service
for any purpose thereunder.
b. Perquisities. During the Contract Employment Period,
____________
Executive shall be entitled to receive such perquisites as are
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generally provided to other senior officers of the Company in
accordance with the then current policies and practices of the
Company.
c. Business Expenses. During the Contract Employment
_________________
Period, the Company shall pay or reimburse Executive for all
reasonable expenses incurred or paid by Executive in the
performance of Executive's duties hereunder, upon presentation of
expense statements or vouchers and such other information as the
Company may require and in accordance with the generally
applicable policies and procedures of the Company.
6. Termination of Employment.
__________________________
a. Early Termination of the Contract Employment Period.
___________________________________________________
Notwithstanding Paragraph 1, the Contract Employment Period shall
end upon the earliest to occur of (i) a termination of Executive's
_
employment on account of Executive's death, (ii) a Termination due
__
to Disability, (iii) a Termination for Cause, (iv) a Termination
___ __
Without Cause, (v) a Termination for Good Reason or (vi) a
_ __
termination of Executive's employment by Executive other than a
Termination for Good Reason. For purposes of this Agreement, a
transfer of Executive's employment (i) to any other entity
_
controlled by or under common control with the Company shall not
be treated as a termination unless and until such entity ceases to
be controlled by or under common control with the Company or (ii)
__
as a result of the implementation of any restructuring of the
Company (whether occurring by spin-off or otherwise) shall not be
treated as a termination of employment, provided that, in either
_____________
case, the successor employer (the "New Entity") expressly assumes
and agrees to perform all of the Company's obligations under this
Agreement.
b. Benefits Payable Upon Termination. Following the end
_________________________________
of the Contract Employment Period pursuant to Paragraph 6(a),
Executive (or, in the event of his death, his surviving spouse, if
any, or his estate) shall be paid the type or types of
compensation determined to be payable in accordance with the
following table at the times established pursuant to Paragraph
6(c):
Earned Vested Accrued Severance
Salary Benefits Bonus Benefit
________ __________ ________ ________
Termination due Payable Payable Payable Not Payable
to death
Termination due to Payable Payable Payable Not Payable
Disability
Termination for Payable Payable Not Payable Not Payable
Cause
Termination Without Payable Payable Payable Payable
Cause
Termination for Payable Payable Payable Payable
Good Reason
Termination by Payable Payable Not Payable Not Payable
Executive other than
for Good Reason
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c. Timing of Payments. Earned Salary and Accrued Bonus
__________________
shall be paid in a single lump sum as soon as practicable, but in
no event more than 30 days, following the end of the Contract
Employment Period. Vested Benefits shall be payable in accordance
with the terms of the plan, policy, practice, program, contract or
agreement under which such benefits have accrued.
Severance Benefits shall be paid in approximately equal
installments, at the same intervals at which Executive was
receiving his salary payments hereunder, for the greater of (i)
_
one year, (ii) the period over which such benefits would be
__
payable if paid to Executive under the Company's otherwise
applicable plans, policies or procedures as currently in effect or
(iii) the period over which such benefits would be payable if paid
___
to Executive under the Company's otherwise applicable plans,
policies or procedures, as in effect at the time of Executive's
termination of employment. Notwithstanding the foregoing,
Executive may elect, by written notice given to the Company prior
to the first periodic payment and within ten business days after
such termination, that, instead of periodic installments,
Severance Benefits shall be paid in either a single lump sum,
payable within ten business days of receipt by the Company of such
election, or in two equal installments, the first payable within
ten business days of receipt by the Company of such election, and
the second payable on the first business day of the following
calendar year.
d. Definitions. For purposes of this Paragraph 6,
___________
capitalized terms have the following meanings:
"Accrued Bonus" means a pro-rated amount equal to the product
of (i) the annual incentive compensation Executive would have been
_
entitled to receive under Paragraph 3(b) for the calendar year in
which his active service for the Company terminates pursuant to
Paragraph 6(a) had he remained employed for the entire year and
assuming that all targets for such year had been met, multiplied
by (ii) a fraction, the numerator of which is equal to the number
__
of days in such calendar year occurring on or prior to the
termination of Executive's active service for the Company
(including any period of absence due to disability) and the
denominator of which is 365.
"Earned Salary" means any Base Salary earned, but unpaid, for
services rendered to the Company on or prior to the date on which
the Contract Employment Period ends (other than Base Salary
deferred pursuant to Executive's election, as provided in
Paragraph 3(a) hereof).
"Severance Benefit" means an amount equal to the sum of (i)
and (ii) below, where (i) and (ii) are:
(I) the sum of
(A) the annual Base Salary payable to Executive
immediately prior to the end of the Contract
Employment Period; and
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(B) an amount (the "Bonus Severance Amount") equal to the
product of Executive's Base Salary times the greater
of (1) the Minimum Bonus Percentage and (2) the
_ _
percentage of Base Salary that would have been payable
to Executive for the year of such termination assuming
achievement of target levels of performance and
Executive's continued employment for the entire year,
and
(ii) the amount otherwise payable to Executive under the
Company's otherwise applicable severance plans, policies or
programs as in effect on the date hereof (or, if more
favorable to Executive, as in effect on the date of
Executive's termination), assuming for purposes of
determining the amount payable thereunder that Executive's
employment was terminated as a result of the elimination of
his position, but calculated by including the Bonus
Severance Amount as part of Executive's eligible
compensation for purposes of calculating the benefits
payable under such plans, policies or programs;
except that, in the event that Executive becomes entitled to
receive Severance Benefits hereunder following a Change in
Control, the Severance Benefit payable to Executive shall be
determined under Paragraph 7(c). Additionally, while Executive is
receiving payment of Severance Benefits in periodic installments,
Executive shall also be eligible to continue to participate in the
welfare benefit plans and programs (excluding the long-term
disability plan, the sick-pay plan and vacation accruals)
generally made available to employees of the Company and in which
he participated immediately prior to the termination of his
employment on the same terms and conditions as would have applied
had Executive continued to be employed. Upon an election to
receive Severance Benefits in either a single lump sum payment or
in two installments, Executive will forfeit any right to continue
to receive any coverage under the Company's welfare benefit plans,
other than COBRA coverage (determined from the original date of
termination) at Executive's expense as required by applicable law;
provided that, if Executive elects to receive Severance Benefits
_____________
in two installments instead of periodic installments, the Company
shall pay one-half of the cost of Executive's COBRA coverage from
the date the first installment payment is made until the date the
second installment payment is made. Notwithstanding the
foregoing, receipt of a lump sum payment or two installment
payments hereunder shall not cause Executive to cease to be
eligible for any retiree benefit programs for which he is
otherwise eligible under the terms of the Company's employee
benefit plans, policies or programs.
"Termination for Cause" means a termination of Executive's
employment by the Company due to (i) the willful failure by
_
Executive to perform substantially Executive's duties as an
employee of the Company (other than due to physical or mental
illness) after reasonable notice to Executive of such failure,
(ii) Executive's engaging in misconduct that is materially
__
injurious to the Company or any subsidiary or any affiliate of the
Company, (iii) Executive's having been convicted of, or entered a
___
plea of nolo contendere to, a crime that constitutes a felony,
____ __________
(iv) the material breach by Executive of any written covenant or
__
agreement not to compete with the Company or any subsidiary or any
affiliate or (v) the breach by Executive of his duty of loyalty to
_
the Company which shall include, without limitation, (A) the
_
PAGE 7
disclosure by Executive of any confidential information pertaining
to the Company or any subsidiary or any affiliate of the Company,
other than (x) in the ordinary course of the performance of his
_
duties on behalf of the Company or (y) pursuant to a judicial or
_
administrative subpoena from a court or governmental authority
with jurisdiction over the matter in question, (B) the harmful
_
interference by Executive in the business or operations of the
Company or any subsidiary or any affiliate of the Company, (C) any
_
attempt by Executive directly or indirectly to induce any
employee, insurance agent, insurance broker or broker-dealer of
the Company or any subsidiary or any affiliate to be employed or
perform services elsewhere, other than actions taken by Executive
that are intended to benefit the Company or any subsidiary or
affiliate and do not benefit Executive financially other than as
an employee or stockholder of the Company, (D) any attempt by
_
Executive directly or indirectly to solicit the trade of any
customer or supplier, or prospective customer or supplier, of the
Company on behalf of any person other than the Company or a
subsidiary thereof, other than actions taken by Executive that are
intended to benefit the Company or any subsidiary or affiliate and
do not benefit Executive financially other than as an employee or
stockholder of the Company, provided, however, that this provision
________ _______
shall only apply to any product or service which is in competition
with a product or service of the Company or any subsidiary or
affiliate thereof or (E) any breach or violation of the Company's
_
Code of Conduct, as amended from time to time sufficient to
warrant a for cause termination consistent with the Company's past
practice. Notwithstanding the foregoing, a breach of Executive's
duty of loyalty to the Company as described in subclause (A) or a
breach of the Company's Code of Conduct as described in subclause
(E) of clause (v) of the preceding sentence shall not be grounds
for a Termination for Cause unless such breach has had or could
reasonably be expected to have a significant adverse effect on the
business or reputation of the Company.
"Termination due to Disability" means a termination of
Executive's employment by the Company because Executive has been
incapable, with or without reasonable accommodation, of
substantially fulfilling the positions, essential duties,
responsibilities and obligations of Executive's positions set
forth in this Agreement because of physical, mental or emotional
incapacity resulting from injury, sickness or disease for a period
of (i) at least four consecutive months or (ii) more than six
_ __
months in any twelve month period. Any question as to the
existence, extent or potentiality of Executive's disability shall
be made by a qualified, independent physician selected by the
chief or assistant chief (or the equivalent position) of the
department which treats the condition giving rise to Executive's
absence at a nationally or regionally recognized teaching hospital
chosen by the Company. The determination of any such physician
shall be final and conclusive for all purposes of this Agreement.
Notwithstanding the foregoing, (i) a Termination for Disability
_
shall not affect Executive's right to receive any amount that
would otherwise have been payable to Executive under the Company's
plans, policies, practices or programs pertaining to short-term or
long-term disability had Executive's employment continued and (ii)
__
if it is determined, at the time Executive is first eligible to
receive long-term disability benefits under the Company's plans,
policies, practices or programs, that Executive is not entitled to
receive such long-term disability benefits (other than due to
Executive's failure to cooperate), Executive shall, for purposes
of this Paragraph 6, be deemed to have been terminated as of the
PAGE 8
date of such determination pursuant to a Termination Without Cause
and to be entitled to receive any additional benefits payable
hereunder in respect of a Termination Without Cause.
"Termination for Good Reason" means a termination of
Executive's employment by Executive within 90 days following
actual knowledge of (i) a reduction in Executive's annual Base
_
Salary or incentive compensation opportunity as provided under
Paragraph 3(b), (ii) a material reduction in Executive's
__
positions, duties and responsibilities from those described in
Paragraph 2 hereof, (iii) the relocation of Executive's principal
___
place of employment to a location more than 50 miles from the
location at which he performed his principal duties on the date
immediately prior to such relocation, (iv) a breach of the
__
obligation to provide Executive with the benefits required to be
provided in accordance with Paragraph 5(a), (v) a failure by the
__
Company to pay any amounts due and owing to Executive within 10
days following written notice from Executive of such failure to
pay, or (vi) any other material breach of the Company's
__
obligations to Executive hereunder that materially affects the
compensation or benefits payable to Executive or materially
impairs Executive's ability to perform the duties and
responsibilities of his position. Notwithstanding the foregoing,
a termination shall not be treated as a Termination for Good
Reason (i) if Executive shall have consented in writing to the
_
occurrence of the event giving rise to the claim of Termination
for Good Reason or (ii) unless Executive shall have delivered a
__
written notice to the Chief Executive Officer of the Company
within 60 days of his having actual knowledge of the occurrence of
one of such events stating that he intends to terminate his
employment for Good Reason and specifying the factual basis for
such termination, and such event shall not have been cured within
30 days of the receipt of such notice.
"Termination Without Cause" means any termination of
Executive's employment by the Company other than (i) a Termination
_
due to Disability or (ii) a Termination for Cause. Subject to the
__
Company's obligations to make the payments, if any, required
pursuant to this paragraph 6, nothing in this Agreement shall be
construed to limit the right of the Company to terminate
Executive's employment at any time for any reason or without
reason.
"Vested Benefits" means amounts payable under the terms of or
in accordance with any plan, policy or practice or program of, or
any contract or agreement with, the Company or any of its
subsidiaries (including, without limitation, any supplemental
pension plan, supplemental savings plan or other deferred
compensation arrangement, the 1994 Plan and the Company's 1984
Stock Option Plan (the "1984 Plan") with respect to which
Executive's rights to such amounts (i) have become vested and
_
nonforfeitable on or before Executive's termination of employment
or (ii) otherwise have or will become nonforfeitable at or
__
subsequent to his termination of employment without regard to the
performance by Executive of further services or the resolution of
a contingency that is not satisfied at or after such termination,
provided that, at any time during which Executive is entitled to
_____________
receive the Severance Benefits hereunder, Executive shall not also
be entitled to receive any benefits under the Company's generally
applicable severance or other termination plans, policies or
programs.
PAGE 9
e. Full Discharge of Company Obligations. Except to the
_____________________________________
extent provided in this Paragraph 6, the amounts payable to
Executive pursuant to this Paragraph 6 (including, without
limitation, under Paragraph 6(f)) following termination of his
employment shall be in full and complete satisfaction of
Executive's rights under this Agreement and, except to the extent
prohibited by law, any other claims he may have in respect of his
employment by the Company or any of its subsidiaries. Such
amounts shall constitute liquidated damages with respect to any
and all such rights and claims and shall not be subject to any
offset or mitigation. Notwithstanding anything else contained
herein to the contrary, unless the Company shall waive its rights
to any such release, the Company's obligations under this
Paragraph 6 are expressly conditioned upon Executive's execution
simultaneously with or immediately following such termination of
employment, of a release and waiver, substantially in the form
attached hereto as Exhibit B (subject to, in the event any change
of law occurring after the date hereof, to such modifications as
shall be necessary or appropriate to place the Company in a
substantially the same position as though no change in law had
occurred), of any claims he may have in connection with the
termination of, or arising out of, his employment with the
Company, provided that such release shall not be construed to
waive, release or otherwise limit any amounts required to be paid
hereunder or any benefits due and payable to Executive under the
terms of any employee pension benefit plan, as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974, as
amended, any other Vested Benefit or any right of Executive to be
indemnified by the Company pursuant to its applicable policies and
practices from and against any third party claims arising out of
or relating to Executive's employment with or other services on
behalf of the Company or any subsidiary of the Company.
f. Special Continuation of Certain Protection for the
___________________________________________________
Executive. Notwithstanding anything contained in this Agreement
_________
to the contrary, if, at the end of the Contract Employment Period,
(i) Executive remains an at-will employee of the Company and (ii)
_ __
within one year following the end of the Contract Employment
Period, the Company effects a Termination Without Cause or takes
actions which, if they had occurred within the Contract Employment
Period, would have given Executive the right to terminate his
employment pursuant to a Termination for Good Reason and
Executive, after giving the Company timely written notice of the
events permitting a Termination for Good Reason and the
opportunity to cure described in the definition of a Termination
for Good Reason, voluntarily terminates his employment within 90
days of the date of such actions by the Company, then in either
case, Executive shall receive payment of the Severance Benefits
that would otherwise have been payable to Executive hereunder had
his termination of employment occurred during the Contract
Employment Period. Notwithstanding the preceding sentence, this
Section 6(f) shall not be applicable unless Executive executes the
waiver and release referred to in Paragraph 6(e) above in
connection with his termination of employment pursuant to this
Paragraph 6(f).
g. Outplacement Services. In addition to any other
_____________________
benefits described in this Paragraph 6, in the event Executive is
eligible to receive Severance Benefits, the Company shall also
provide to Executive, at its expense, individual outplacement
services from a qualified outplacement firm selected by the
Company. The outplacement services to be provided to Executive
PAGE 10
shall be no less favorable to Executive than those made available
to other executives prior to the date hereof under the Company's
generally applicable policies, programs or arrangements.
7. Change in Control of the Company.
________________________________
a. Accelerated Vesting and Payment. Unless the Board (or
_______________________________
the appropriate committee thereof) shall otherwise determine in
the manner set forth in Paragraph 7(b), the Option shall become
fully exercisable upon the occurrence of a Change in Control (as
defined below) and shall remain exercisable for a period of one
year thereafter regardless of whether Executive continues to be
employed by the Company or, if longer, for the period during which
such Option would otherwise be exercisable in accordance with its
terms or the generally applicable provisions of the 1994 Plan. If
no Alternative Option is provided as set forth in Section 7(b)
below, and the Company does not survive as a publicly traded
corporation following a Change in Control, the Company shall pay
Executive, in full settlement of all rights with respect to the
Option, an aggregate amount in cash equal to the product of (i)
__
(A) the Fair Market Value of a Share of the Company's Common Stock
on the date the Change in Control occurs minus (B) the per share
exercise price for the Option times (ii) the number of shares as
__
to which such Option has not been exercised at the time of the
Change in Control. Any amount payable pursuant to the preceding
sentence shall be paid within 30 days following such Change in
Control.
b. Alternative Options. Notwithstanding Paragraph 7(a), no
___________________
acceleration of exercisability shall occur with respect to any
Option if the Board (or the appropriate committee thereof)
reasonably determines in good faith, prior to the occurrence of a
Change in Control, that such Option shall be honored or assumed,
or new rights substituted therefor (such honored, assumed or
substituted Option being hereinafter referred to as an
"Alternative Option") by the successor in interest to the Company,
provided that any such Alternative Option must:
________ ____
(i) provide Executive with rights and entitlements
substantially equivalent to or better than the rights,
terms and conditions applicable under the Option,
including, but not limited to, an identical or better
exercise and vesting schedule and identical or better
timing and methods of payment;
(ii) have substantially equivalent economic value to such
Option (determined at the time of the Change in
Control); and
(iii) have terms and conditions which provide that, in the
event that Executive's employment is terminated by the
Company for any reason or is terminated by Executive
pursuant to a Termination for Good Reason within two
years following a Change in Control, (A) any conditions
_
on Executive's rights under, or any restrictions on
exercisability applicable to, each such Alternative
Option shall be waived or shall lapse, as the case may
be and (B) the Alternative Option shall remain
_
exercisable until the second anniversary of the Change
in Control or, if longer, for the period during which
such Alternative Option would otherwise be exercisable
PAGE 11
in accordance with its terms or the provisions of the
plan under which it is granted that permit the longest
post-termination exercise period for involuntary
terminations (other than due to death, disability or
retirement).
c. Enhanced Severance Payments. If Executive's employment
___________________________
is terminated following a Change in Control pursuant to
a Termination for Good Reason or a Termination Without
Cause, the Severance Benefit payable to Executive
pursuant to Paragraph 6 shall be equal to three times
the sum of Executive's annual Base Salary and the Bonus
Severance Amount.
d. Additional Payments by the Company.
__________________________________
(i) Application of Paragraph 7(d). In the event that any
_____________________________
amount or benefit paid or distributed to Executive
pursuant to this Agreement, taken together with any
amounts or benefits otherwise paid or distributed to
Executive by the Company or any affiliated company
(collectively, the "Covered Payments"), would be an
"excess parachute payment" as defined in Section 280G of
the Code and would thereby subject Executive to the tax
(the "Excise Tax") imposed under Section 4999 of the Code
(or any similar tax that may hereafter be imposed), the
provisions of this Section 7(d) shall apply to determine
the amounts payable to Executive pursuant to this
Agreement.
(ii) Calculation of Benefits. Immediately following delivery
_______________________
of any Notice of Termination, the Company shall notify
Executive of the aggregate present value of all
termination benefits to which he would be entitled under
this Agreement and any other plan, program or arrangement
as of the projected date of termination, together with
the projected maximum payments, determined as of such
projected date of termination that could be paid without
Executive being subject to the Excise Tax.
(iii) Imposition of Payment Cap. If the aggregate value of all
_________________________
compensation payments or benefits to be paid or provided
to Executive under this Agreement and any other plan,
agreement or arrangement with the Company exceeds the
amount which can be paid to Executive without Executive
incurring an Excise Tax by less than 105%, then the
amounts payable to Executive under this Agreement may, in
the discretion of the Company, be reduced (but not below
zero) to the maximum amount which may be paid hereunder
without Executive becoming subject to such an Excise Tax
(such reduced payments to be referred to as the "Payment
Cap"). In the event that Executive receives reduced
payments and benefits hereunder, Executive shall have the
right to designate which of the payments and benefits
otherwise provided for in this Agreement that he will
receive in connection with the application of the Payment
Cap.
PAGE 12
(iv) Further Payments by the Company. If the aggregate value
_______________________________
of all compensation payments or benefits to be paid or
provided to Executive under this Agreement and any other
plan, agreement or arrangement with the Company exceeds
the amount which can be paid to Executive without
Executive incurring an Excise Tax by more than 105%, the
Company shall pay to Executive immediately following
Executive's termination of employment an additional
amount (the "Tax Reimbursement Payment") such that the
net amount retained by Executive with respect to such
Covered Payments, after deduction of any Excise Tax on
the Covered Payments and any Federal, state and local
income tax and Excise Tax on the Tax Reimbursement
Payment provided for by this Paragraph 7(d)(iv), but
before deduction for any Federal, state or local income
or employment tax withholding on such Covered Payments,
shall be equal to the amount of the Covered Payments.
(v) Application of Section 280G. For purposes of determining
___________________________
whether any of the Covered Payments will be subject to
the Excise Tax and the amount of such Excise Tax,
(A) such Covered Payments will be treated as
"parachute payments" within the meaning of Section
280G of the Code, and all "parachute payments" in
excess of the "base amount" (as defined under
Section 280G(b)(3) of the Code) shall be treated
as subject to the Excise Tax, unless, and except
to the extent that, in the good faith judgment of
the Company's independent certified public
accountants appointed prior to the Effective Date
or tax counsel selected by such Accountants (the
"Accountants"), the Company has a reasonable basis
to conclude that such Covered Payments (in whole
or in part) either do not constitute "parachute
payments" or represent reasonable compensation for
personal services actually rendered (within the
meaning of Section 280G(b)(4)(B) of the Code) in
excess of the "base amount," or such "parachute
payments" are otherwise not subject to such Excise
Tax, and
(B) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by the
Accountants in accordance with the principles of
Section 280G of the Code.
(vi) Applicable Tax Rates. For purposes of determining
____________________
whether Executive would receive a greater net after-tax
benefit were the amounts payable under this Agreement
reduced in accordance with Paragraph 7(d)(iii),
Executive shall be deemed to pay:
(A) Federal income taxes at the highest applicable
marginal rate of Federal income taxation for the
calendar year in which the first amounts are to
be paid hereunder, and
PAGE 13
(B) any applicable state and local income taxes at
the highest applicable marginal rate of taxation
for such calendar year, net of the maximum
reduction in Federal incomes taxes which could be
obtained from the deduction of such state or
local taxes if paid in such year;
provided, however, that Executive may request that such
determination be made based on his individual tax
circumstances, which shall govern such determination so
long as Executive provides to the Accountants such
information and documents as the Accountants shall
reasonably request to determine such individual
circumstances.
(vii) Adjustments in Respect of the Payment Cap. If
_________________________________________
Executive receives reduced payments and benefits under
this Paragraph 7(d) (or this Paragraph 7(d) is
determined not to be applicable to Executive because
the Accountants conclude that Executive is not subject
to any Excise Tax) and it is established pursuant to a
final determination of a court or an Internal Revenue
Service proceeding (a "Final Determination") that,
notwithstanding the good faith of Executive and the
Company in applying the terms of this Agreement, the
aggregate "parachute payments" within the meaning of
Section 280G of the Code paid to Executive or for his
benefit are in an amount that would result in Executive
being subject an Excise Tax, then the amount equal to
such excess parachute 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 the payment hereunder to the
date of repayment by Executive. If this Paragraph 7(d)
is not applied to reduce Executive's entitlements under
this Paragraph 7 because the Accountants determine that
Executive would not receive a greater net-after tax
benefit by applying this Paragraph 7(d) and it is
established pursuant to a Final Determination that,
notwithstanding the good faith of Executive and the
Company in applying the terms of this Agreement,
Executive would have received a greater net after tax
benefit by subjecting his payments and benefits
hereunder to the Payment Cap, then the aggregate
"parachute payments" paid to Executive or for his
benefit in excess of the Payment Cap shall be deemed
for all purposes 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 the payment
hereunder to the date of repayment by Executive. If
Executive receives reduced payments and benefits by
reason of this Paragraph 7(d) and it is established
pursuant to a Final Determination that Executive could
have received a greater amount without exceeding
the Payment Cap, then the Company shall promptly
thereafter pay
PAGE 14
Executive the aggregate additional amount which could
have been paid without exceeding the Payment Cap,
together with interest on such amount at the applicable
Federal rate (as defined in Section 1274(d) of the
Code) from the original payment due date to the date of
actual payment by the Company.
(viii) Adjustments in Respect of the Tax Reimbursement
________________________________________________
Payments. In the event that the Excise Tax is
________
subsequently determined by the Accountants or pursuant
to any proceeding or negotiations with the Internal
Revenue Service to be less than the amount taken into
account hereunder in calculating the Tax Reimbursement
Payment made, Executive shall repay to the Company,
at the time that the amount of such reduction in the
Excise Tax is finally determined, the portion of such
prior Tax Reimbursement Payment that would not have
been paid if such Excise Tax had been applied in
initially calculating such Tax Reimbursement Payment,
plus interest on the amount of such repayment at the
rate provided in Section 1274(b)(2)(B) of the Code.
Notwithstanding the foregoing, in the event any portion
of the Tax Reimbursement 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.
In the event that the Excise Tax is later determined by
the Accountants or pursuant to any proceeding or
negotiations with the Internal Revenue Service to
exceed the amount taken into account hereunder at the
time the Tax Reimbursement Payment is made (including,
but not limited to, by reason of any payment the
existence or amount of which cannot be determined at
the time of the Tax Reimbursement Payment), the Company
shall make an additional Tax Reimbursement Payment in
respect of such excess (plus any interest or penalty
payable with respect to such excess) at the time that
the amount of such excess is finally determined.
(ix) Timing of Payment. Any Tax Reimbursement Payment (or
_________________
portion thereof) provided for in Paragraph 7(d)(iv)
above shall be paid to Executive not later than 10
business days following the payment of the Covered
Payments; provided, however, that if the amount of such
Tax Reimbursement Payment (or portion thereof) cannot
be finally determined on or before the date on which
payment is due, the Company shall pay to Executive by
such date an amount estimated in good faith by the
Accountants to be the minimum amount of such Tax
Reimbursement Payment and shall pay the remainder of
such Tax Reimbursement Payment (together with interest
at the rate provided in Section 1274(b)(2)(B) of the
Code) as soon as the amount thereof can be determined,
PAGE 15
but in no event later than 45 calendar days after
payment of the related Covered Payment. In the event
that the amount of the estimated Tax Reimbursement
Payment exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by
the Company to Executive, payable on the fifth business
day after written demand by the Company for payment
(together with interest at the rate provided in Section
1274(b)(2)(B) of the Code).
e. Definition of "Change in Control". For purposes
________________________________
of this Paragraph 7, a "Change in Control" means
the happening of any of the following:
(i) When any "person" as defined in Section 3(a)(9) of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and as used in Sections 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;
(ii) When, during any period of 24 consecutive months
after the Commencement Date, the individuals who, at the
beginning of such period, constitute the Board (the
"Incumbent Directors") cease for any reason other than death
to constitute at least a 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 7(e)(ii); or
(iii) 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.
8. Noncompetition and Confidentiality.
__________________________________
a. Noncompetition. During the Contract
______________
Employment Period and for a period of one year following
Executive's termination of employment during the Contract
Employment Period other than due to a Termination Without Cause
or a Termination for Good Reason, Executive shall not become
associated, whether as a principal, partner, employee, consultant
or shareholder (other than as a holder of not in excess of 1% of
the outstanding voting shares of any publicly traded company),
with any entity that is actively engaged in any geographic area
in any business which is in substantial and direct competition
with the business or businesses of the Company for which
Executive provides substantial services or for which Executive
has substantial responsibility, provided that nothing in this
________ ____
PAGE 16
Paragraph 8(a) shall preclude Executive from performing services
solely and exclusively for a division or subsidiary of such an
entity that is engaged in a non-competitive business.
b. Nondisclosure, Nonsolicitation and Cooperation.
______________________________________________
(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; product
development and related information; marketing plans and
related information; sales plans and related information;
operating policies and manuals; business plans; financial
records; or other financial, commercial, business or
technical information related to the Company or any
subsidiary or affiliate thereof 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 Executive is
employed by the Company, or any subsidiary or affiliate
thereof in the ordinary course of the performance of
Executive's duties;
(ii) during the Contract Employment Period and for
two years after the termination of such Period, Executive
shall not attempt, directly or indirectly, to induce any
employee or Insurance Agent (as defined below) of the
Company, or any subsidiary or any affiliate thereof to be
employed or perform services elsewhere provided that this
________ ____
covenant shall not preclude Executive from taking any
actions during the Contract Employment Period that (x) are
_
intended to benefit the Company or any subsidiary or
affiliate and (y) do not benefit Executive financially other
_
than as an employee or stockholder of the Company;
(iii) during the Contract Employment Period and for
two years after the termination of such Period, Executive
shall not attempt, directly or indirectly, to induce any
insurance agent or agency, insurance broker, broker-dealer
or supplier of the Company, or any subsidiary or affiliate
thereof to cease providing services to the Company, or any
subsidiary or affiliate thereof provided that this covenant
________ ____
shall not preclude Executive from taking any actions during
the Contract Employment Period that (x) are intended to
_
benefit the Company or any subsidiary or affiliate and (y)
_
do not benefit Executive financially other than as an
employee or stockholder of the Company;
(iv) during the Contract Employment Period and for
two years after the termination of such Period, Executive
shall not attempt, directly or indirectly, to solicit, on
behalf of any person or entity other than the Company or any
of its subsidiaries, the trade of any individual or entity
which, at the time of the solicitation, is a customer of the
Company, or any subsidiary or affiliate thereof, or which
the Company, or any subsidiary or affiliate thereof is
undertaking reasonable steps to procure as a customer at the
time of or immediately preceding termination of the Contract
PAGE 17
Employment Period; provided, however, that this limitation
________ _______
shall only apply to (x) any product or service which is in
_
competition with a product or service of the Company or any
subsidiary or affiliate thereof and (y) with respect to any
_
customer or prospective customer with whom Executive has or
had (by virtue of Executive's position or otherwise) a
personal relationship; and
(v) following the termination of the Contract
Employment Period, Executive shall provide assistance to and
shall cooperate with the Company or any subsidiary or
affiliate thereof, upon its reasonable request, with respect
to matters within the scope of Executive's duties and
responsibilities during the Contract Employment Period.
(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 thereof to coordinate) any such request with
Executive's other commitments and responsibilities to
minimize the degree to which such request interferes with
such commitments and responsibilities). The Company agrees
that it will reimburse Executive for reasonable travel
expenses (i.e., travel, meals and lodging) that Executive
____
may incur in providing assistance to the Company hereunder.
Solely for purposes of Paragraph 8(b)(ii) above, the term "
Insurance Agent" shall mean those insurance agents or agencies
representing the Company or any subsidiary or affiliate thereof,
that are exclusive or career agents or agencies of the Company or
any subsidiary or affiliate thereof, or any insurance agents or
agencies which derive 50% or more of their business revenue from
the Company or any subsidiary or affiliate thereof (calculated on
an aggregate basis for the 12-month period prior to the date of
determination or such other similar period for which such
information is more readily available).
c. Company Property. Promptly following Executive's
________________
termination of employment, Executive shall return to the Company
all property of the Company, and all copies thereof in Executive's
possession or under his control.
d. Intention of the Parties. If any provision of
________________________
Paragraph 8 is determined by an arbitrator (or a court of
competent jurisdiction asked to enforce the decision of the
arbitrator) 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
arbitrator (or court) shall reform such provision to make it
enforceable in accordance with the intent of the parties.
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 Paragraph 8(a), (b) and (c) 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 have no further obligation to pay Executive any
benefits otherwise payable hereunder and the Company shall be
entitled to an injunction, restraining order or such other
PAGE 18
equitable relief (without the requirement to post a bond)
restraining Executive from committing any violation of the
covenants and obligations contained in Paragraph 8(a), (b) and
(c). 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.
e. Waiver. Without limiting the generality of the
______
foregoing, upon request of Executive prior to engaging in any
conduct otherwise prohibited by this Paragraph 8, the Company may,
in its sole discretion, waive in writing, on such terms and
conditions as it may deem appropriate, any violation of this
Paragraph 8 which would otherwise occur due to such conduct.
9. Miscellaneous.
_____________
a. Survival. Paragraphs 5(c) (dealing with reimbursement
________
of expenses), 7 (relating to a Change in Control), 8 (relating to
noncompetition, nonsolicitation and confidentiality) and 9
(relating, among other things, to survival, assignment and
governing law) shall survive the termination hereof, whether such
termination shall be by expiration of the Contract Employment
Period or an early termination pursuant to Paragraph 6 hereof.
Paragraph 6((other than Paragraph 6(f)) (relating to early
termination) shall survive the termination hereof to the extent
that, prior thereto, or at the time of termination, Executive (or
his beneficiary) has become or becomes entitled to receive any of
the benefits payable thereunder. Paragraph 6(f) (and to the
extent applicable to such Paragraph 6(f), 6(e)) shall survive for
one year following the termination hereof. The option referred to
in Paragraph 4 survives for the term specified in Attachment A.
b. Binding Effect. This Agreement shall be binding on,
______________
and shall inure to the benefit of, the Company and any person or
entity that succeeds to the interest of the Company (regardless of
whether such succession does or does not occur by operation of
law) by reason of the sale of all or a portion of the Company's
stock, a merger, consolidation or reorganization involving the
Company or, unless in the case of a sale involving less than all
or substantially all of the Company's assets the Company otherwise
elects in writing, a sale of the assets of the business of the
Company (or portion thereof) in which Executive performs a
majority of his services. Any successor in interest to the
Company shall acknowledge in writing to Executive that it has
assumed this Agreement and is responsible to Executive for the
performance of the Company's obligations under this Agreement.
Without limiting the generality of the foregoing, the Company
shall have the right, without the consent of Executive, to assign
this Agreement and its obligations hereunder to any New Entity or
any subsidiary of any New Entity by which Executive becomes
employed, at the discretion of the Company, by reason of the
implementation of any restructuring of the Company, and, following
any such assignment, such New Entity or subsidiary shall be
treated as the Company for all purposes of this Agreement. This
Agreement shall also enure to the benefit of Executive's heirs,
executors, administrators and legal representatives.
c. Assignment. Except as provided under Paragraph 9(b),
__________
neither this Agreement nor any of the rights or obligations
hereunder shall be assigned or delegated by any party hereto
without the prior written consent of the other party. In the
PAGE 19
event the Company assigns this Agreement pursuant to Section 9(b),
the Company shall guarantee payment to Executive of any amounts at
any time due and payable hereunder in the event (and only to the
extent) that the assignee has become a debtor in bankruptcy, is
the subject of a receivership or similar preceding or has become
insolvent, provided that Executive shall be required to assign his
________ ____
rights against the assignee through subrogation as a condition of
receiving any payment under the Company's guarantee. In
consideration of such guarantee, Executive agrees that following
such assignment, the covenants of Executive in Paragraphs 8(b)(i)
and (v) shall continue to inure to the benefit of the Company, as
well as the assignee. The Company and Executive agree that
following any assignment all other covenants described herein in
favor of the Company shall, from and after the date of such
assignment, inure solely to the benefit of the assignee.
d. Entire Agreement. Except as expressly provided below,
________________
this Agreement, the Option Agreement and Paragraph 3 of the letter
dated February 7, 1991 from Xxxxxx X. Xxxxxxx to Executive shall
constitute the entire agreement between the parties hereto with
respect to the matters referred to herein and any other agreement
or any portion of any such other agreement not expressly preserved
hereby shall cease to be effective upon the execution hereof and
shall not become reinstated upon the expiration or other
termination of this Agreement. There are no promises,
representations, inducements or statements between the parties
other than those that are expressly contained herein. Executive
acknowledges that he is entering into this Agreement of his own
free will and accord, and with no duress, that he has read this
Agreement and that he understands it and its legal consequences.
Other than the provisions of Paragraph 6 which limit Executive's
eligibility to receive severance benefits under the Company's
generally applicable plans, programs or agreements, nothing in
this Agreement shall be construed to limit or otherwise supersede
Executive's rights or entitlements under any compensatory plan,
program or arrangement made available generally to all employees
or all officers of the Company or under the 1994 Plan or the 1984
Plan and this Paragraph 9(d) shall not preclude reference to the
documents governing any such plan, program or arrangement to
determine such rights and entitlements.
e. Severability; Reformation. In the event that one or
_________________________
more of the provisions of this Agreement shall become invalid,
illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein
shall not be affected thereby. In the event any of Paragraph
8(a), (b) or (c) is not enforceable in accordance with its terms,
Executive and the Company agree that such Paragraph shall be
reformed to make such Paragraph enforceable in a manner which
provides the Company the maximum rights permitted at law.
f. Waiver. Waiver by any party hereto of any breach or
______
default by the other party of any of the terms of this Agreement
shall not operate as a waiver of any other breach or default,
whether similar to or different from the breach or default waived.
No waiver of any provision of this Agreement shall be implied
from any course of dealing between the parties hereto or from any
failure by either party hereto to assert its or his rights
hereunder on any occasion or series of occasions.
PAGE 20
g. Notices. Any notice required or desired to be
_______
delivered under this Agreement shall be in writing and shall be
delivered personally, by courier service, by registered mail,
return receipt requested, or by telecopy and shall be effective
upon actual receipt by the party to which such notice shall be
directed, and shall be addressed as follows (or to such other
address as the party entitled to notice shall hereafter designate
in accordance with the terms hereof):
If to the Company:
Aetna Life and Casualty Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx
Attention: Corporate Secretary
If to Executive:
Xxxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
h. Arbitration. The Company and Executive agree that any
___________
claim, dispute or controversy arising under or in connection with
this Agreement, or otherwise in connection with Executive's
employment by the Company (including, without limitation, any such
claim, dispute or controversy arising under any federal, state or
local statute, regulation or ordinance or any of the Company's
employee benefit plans, policies or programs) shall be resolved
solely and exclusively by binding arbitration. The arbitration
shall be held in the city of Hartford, Connecticut (or at such
other location as shall be mutually agreed by the parties). The
arbitration shall be conducted in accordance with the Expedited
Employment Arbitration Rules (the "Rules") of the American
Arbitration Association (the "AAA") in effect at the time of the
arbitration, except that the arbitrator shall be selected by
alternatively striking from a list of five arbitrators supplied by
the AAA. All fees and expenses of the arbitration, including a
transcript if either requests, shall be borne equally by the
parties. If Executive prevails as to any material issue presented
to the arbitrator, the entire cost of such proceedings (including,
without limitation, Executive's reasonable attorneys fees) shall
be borne by the Company. If Executive does not prevail as to any
material issue, each party will pay for the fees and expenses of
its own attorneys, experts, witnesses, and preparation and
presentation of proofs and post-hearing briefs (unless the party
prevails on a claim for which attorney's fees are recoverable
under the Rules). Any action to enforce or vacate the
arbitrator's award shall be governed by the Federal Arbitration
Act, if applicable, and otherwise by applicable state law. If
either the Company or Executive pursues any claim, dispute or
controversy against the other in a proceeding other than the
arbitration provided for herein, the responding party shall be
entitled to dismissal or injunctive relief regarding such action
and recovery of all costs, losses and attorney's fees related to
such action.
PAGE 21
i. Amendments. This Agreement may not be altered,
__________
modified or amended except by a written instrument signed by each
of the parties hereto.
j. Headings. Headings to paragraphs in this Agreement
________
are for the convenience of the parties only and are not intended
to be part of or to affect the meaning or interpretation hereof.
k. Counterparts. This Agreement may be executed in
____________
counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
l. Withholding. Any payments provided for herein shall
___________
be reduced by any amounts required to be withheld by the Company
from time to time under applicable Federal, State or local income
or employment tax laws or similar statutes or other provisions of
law then in effect.
m. Governing Law. This Agreement shall be governed by
_____________
the laws of the State of Connecticut, without reference to
principles of conflicts or choice of law under which the law of
any other jurisdiction would apply.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer and Executive has
hereunto set his hand as of the day and year first above written.
Aetna Life and Casualty Company
/s/ Xxxxxx X. Xxxxxxx
_______________________________
Xxxxxx X. Xxxxxxx
Chairman
/s/ Xxxxxx X. Xxxxxxx
_______________________________
Xxxxxx X. Xxxxxxx
