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EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT, dated as of January 19, 1996, by
and between Aetna Life and Casualty Company, a Connecticut
corporation (the "Company"), and Xxxxx X. XxXxxx ("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),
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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, Health/Group Life, 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 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.
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Nothing contained herein shall preclude Executive from (i) serving
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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
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for, any charitable, not-for-profit or community organization,
(iii) pursuing any other activity to which the Board consents or
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(iv) pursuing his personal, financial and legal affairs, so long
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as such activities, individually or collectively, do not interfere
with the performance of Executive's duties hereunder.
3. Cash Compensation.
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a. Base Salary. During the Contract Employment
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Period, the Company shall pay Executive a base salary at the
annual rate of $600,000. 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
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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
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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
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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)
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
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of this Agreement by the Executive, the Company has granted
Executive an option, having a ten-year term, to purchase 75,000
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.
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5. Benefits, Perquisites and Expenses.
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a. Benefits. During the Contract Employment Period,
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Executive shall be eligible to participate in (i) each welfare
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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,
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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
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that, following the occurrence of a Change in Control (as defined
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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. Perquisites. During the Contract Employment
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Period, Executive shall be entitled to receive such perquisites as
are 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
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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.
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a. Early Termination of the Contract Employment
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Period. Notwithstanding Paragraph 1, the Contract Employment
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Period shall end upon the earliest to occur of (i) a termination
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of Executive's employment on account of Executive's death, (ii) a
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Termination due to Disability, (iii) a Termination for Cause, (iv)
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a Termination Without Cause, (v) a Termination for Good Reason or
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(vi) a termination of Executive's employment by Executive other
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than a Termination for Good Reason. For purposes of this
Agreement, a transfer of Executive's employment (i)to any other
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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
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restructuring of the Company (whether occurring by spin-off or
otherwise) shall not be treated as a termination of employment,
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provided that, in either case, the successor employer (the "New
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Entity") expressly assumes and agrees to perform all of the
Company's obligations under this Agreement.
b. Benefits Payable Upon Termination. Following the
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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
c. Timing of Payments. Earned Salary and Accrued
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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)
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one year, (ii) the period over which such benefits would be
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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
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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.
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b. Definitions. For purposes of this Paragraph 6,
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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
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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
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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
(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
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(2) the percentage of Base Salary that would
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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
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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
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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
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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
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materially injurious to the Company or any subsidiary or any
affiliate of the Company, (iii) Executive's having been convicted
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of, or entered a plea of nolo contendere to, a crime that
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constitutes a felony, (iv) the material breach by Executive of any
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written covenant or agreement not to compete with the Company or
any subsidiary or any affiliate or (v) the breach by Executive of
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his duty of loyalty to the Company which shall include, without
limitation, (A) the disclosure by Executive of any confidential
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information pertaining to the Company or any subsidiary or any
affiliate of the Company, other than (x) in the ordinary course of
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the performance of his duties on behalf of the Company or (y)
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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
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business or operations of the Company or any subsidiary or any
affiliate of the Company, (C) any attempt by Executive directly or
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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
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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,
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however, that this provision shall only apply to any product or
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service which is in competition with a product or service of the
Company or any subsidiary or affiliate thereof or (E) any breach
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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
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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
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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
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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)
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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
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
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Salary or incentive compensation opportunity as provided under
Paragraph 3(b), (ii) a material reduction in Executive's
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positions, duties and responsibilities from those described in
Paragraph 2 hereof, (iii) the relocation of Executive's principal
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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
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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
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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
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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.
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"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
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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.
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.
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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
(including, without limitation, the enhanced benefit described in
Section 7(c)) 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
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.
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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) at any time during the term hereof or thereafter
during the period Executive is eligible for the protections
afforded under Section 6(f) 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.
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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 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.
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(i) Application of Paragraph 7(d). In the event that
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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
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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 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.
(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,
12
(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
(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 income 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
13
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 have resulted in
the imposition of the Payment Cap under Section
7(d)(iii) and 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 the Payment Cap was
applied, and it is established pursuant to a Final
Determination that the aggregate "parachute payments"
payable to Executive equals or exceeds 105% of the
amount which could be paid to Executive without
Executive incurring an Excise Tax, Executive shall be
entitled to receive the benefits available under
Section 7(d)(iv). 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 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
14
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, 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:
15
(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 date of this Agreement, 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 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
16
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 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.
17
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
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.
18
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 inure 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
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
________ ____
19
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 the portion, if
any, of any other agreement relating to pension service or credits
referred to in Paragraph 5(a) 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, provided that paragraph 2(h) of that certain letter
dated January 2, 1991 from Xxxxxx X. Xxxxx to Executive relating
to severance pay benefits payable for 52 weeks shall become
reinstated upon expiration 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.
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:
Xxxxx X. XxXxxx
00 Xxxxxx Xxxx
Xxxx Xxxxxxxx, Xxxxxxxxxxx 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.
i. Amendments. This Agreement may not be altered,
__________
modified or amended except by a written instrument signed by each
of the parties hereto.
21
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/ Xxxxx X. XxXxxx
_______________________________
Xxxxx X. XxXxxx
