Exhibit 10.5

 

CIGNA STOCK UNIT PLAN

(Amended and Restated Effective as of February 22, 2017)

 

 

ARTICLE 1

Statement of Purpose

 

The Cigna Stock Unit Plan (the “Plan”) is intended to:

 

(a)                                 provide incentives for and reward key
Company employees by providing them with an opportunity to acquire an equity
interest in Cigna Corporation, thereby increasing their personal interest in its
continued success and progress;

 

(b)                                 aid the Company in attracting and retaining
key personnel of exceptional ability;

 

(c)                                  supplement and balance the Company’s salary
and incentive bonus programs in support of Cigna Corporation’s long-term
strategic plans;

 

(d)                                 motivate and reward the maximization of
Cigna Corporation’s long-term financial results; and

 

(e)                                  encourage decisions and actions by Company
employees that are consistent with the long-range interests of Cigna
Corporation’s shareholders.

 

This Plan is an amendment and restatement, effective February 22, 2017, of the
Plan as previously amended and restated July 22, 2008 and as further amended on
July 28, 2010, under which the Company was authorized to grant Restricted Stock
Units (described in Article 4) from February 28, 1998 to July 21, 2008.  This
amended and restated Plan applies to all Restricted Stock Units granted from and
after February 22, 2017.

 

ARTICLE 2

Definitions

 

For all purposes of this Plan, except as otherwise expressly provided or defined
herein or unless the context otherwise requires, the terms defined in this
Article shall have the meanings set forth below.  Any capitalized term used in
the Plan that is not expressly defined below shall have the meaning as set forth
in the Cigna Long-Term Incentive Plan.

 

2.1                               “Dividend Equivalent Right” means that part of
a Restricted Stock Unit described in Section 4.2.

 

2.2                               “Long-Term Incentive Plan” means the Cigna
Long-Term Incentive Plan attached hereto, as it may be amended from time to
time.

 

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2.3                               “Participant” means an Eligible Employee to
whom a Restricted Stock Unit grant has been made under the Plan.  Members of the
Board of Directors who are not employed by the Company are not eligible to
participate in the Plan.

 

2.4                               “Plan” means the Cigna Stock Unit Plan
(Amended and Restated Effective February 22, 2017), as it may be amended from
time to time.

 

2.5                               “Restricted Stock Unit” means a Restricted
Stock Unit described in Article 4 of the Plan.

 

2.6                               “US Individuals” means individuals who are
(a) United States citizens or resident aliens as of February 22, 2017, (b) not
otherwise covered by (a) above and become United States citizens or resident
aliens as of the year the Restricted Stock Units are paid, except to the extent
the Restricted Stock Units are otherwise exempt from Code Section 409A under
Treasury Regulation Section 1.409A-1(b)(8)(ii)(A), or (c) nonresident aliens as
of February 22, 2017 for whom payment of Restricted Stock Units is, in whole or
in part, considered income from sources within the United States (within the
meaning of Code Section 861).

 

ARTICLE 3

Authority to Make Restricted Stock Unit Grants

 

3.1                               General Powers of the Committee.  The
Committee is authorized in its sole discretion to select Participants and to
grant them Restricted Stock Units in such amounts and upon such terms and
conditions as it shall determine, subject to the limitations, restrictions and
provisions contained in the Plan.

 

3.2                               General Powers of the CEO.  Subject to the
requirements of Delaware law, the CEO is authorized in the CEO’s sole discretion
to select Participants and to grant them Restricted Stock Units in such amounts
and upon such terms and conditions as the CEO shall determine, subject to the
limitations, restrictions and provisions contained in the Plan, including the
following:

 

(a)                                 The CEO may not make any grants to or for
the benefit of (1) members of the Board of Directors or (2) anyone subject to
the requirements of Exchange Act Section 16(a);

 

(b)                                 The CEO must be a member of the Board of
Directors at the time the CEO makes any grant under the Plan; and

 

(c)                                  The maximum number of Restricted Stock
Units which may be granted under this Section 3.2 is ten percent (10%) of the
number of shares of Common Stock authorized to be issued under the Long-Term
Incentive Plan minus any shares of Common Stock granted by the CEO under section
4.3 of that plan.

 

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ARTICLE 4

Restricted Stock Units

 

4.1                               Restricted Stock Unit.  Each Restricted Stock
Unit is a right to receive, subject to the conditions of the Plan and any
conditions specified by the Committee (or CEO) at the time of grant, (a) one
(1) share of Common Stock (the payment of which is described in Section 4.4) and
(b) one (1) Dividend Equivalent Right (the payment of which is described in
Section 4.2).

 

4.2                               Dividend Equivalent Right.  Each Dividend
Equivalent Right described in Section 4.1 shall be a right to receive cash
payments, as described below.  Cash payments of Dividend Equivalent Rights will
be in an amount equal to the number of outstanding rights multiplied by the
amount of any dividend declared and paid on one share of Common Stock, to the
extent the right is outstanding on any such dividend record date.  A Dividend
Equivalent Right shall cease to be outstanding on the earlier of the end of the
time period specified by the Committee in the applicable grant document or the
date such right is forfeited under the terms of the Plan or the applicable grant
document.  Dividends paid on shares of Common Stock during the period while the
Dividend Equivalent Right is outstanding shall be held by the Company and such
accumulated dividends will only be paid when (and if) the applicable Dividend
Equivalent Right vests, provided that the Committee (or CEO) may specify
additional restrictions on the payment of such accumulated dividends in the
applicable grant document. If any Dividend Equivalent Rights are forfeited under
the terms of the Plan or the applicable grant document, the Participant shall
also forfeit the right to any accumulated and future dividends related to such
forfeited rights.  The Committee (or CEO) shall specify in the grant document
the time and form of payment in a manner that complies with the requirements of
Code Section 409A and the regulations thereunder.

 

4.3                               Restrictions on Restricted Stock Units;
Vesting.

 

(a)                                 Except as expressly provided below, a
Restricted Stock Unit shall not be sold, transferred, assigned, pledged or
otherwise disposed of by the Participant.  The Committee in its discretion may
establish different restriction terms for different Restricted Stock Units
evidenced by a single grant.

 

(b)                                 Prior to vesting, a Restricted Stock Unit
shall be subject to forfeiture as described in Section 4.6(a).  Unless vesting
is accelerated by the occurrence of one of the events described in
Section 4.6(b) through (e), the portion of a Restricted Stock Unit described in
Section 4.1(a) will become vested upon the payment date(s) specified in the
applicable grant document.

 

4.4                               Time and Form of Payment.  The portion of a
vested Restricted Stock Unit described in Section 4.1(a) shall be paid in a lump
sum on the earlier of a Participant’s death or the payment date(s) specified in
the applicable Restricted Stock Unit grant document.  Any payment upon a
Participant’s death shall be made to the Participant’s surviving spouse or, if
the Participant’s surviving spouse does not survive the Participant, to the
Participant’s estate during the 90 day period immediately following the
Participant’s death.  A Restricted Stock Unit shall cease to be outstanding and
a Participant shall have no further rights related to such Restricted Stock Unit

 

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(including Dividend Equivalent Rights) upon the earlier of payment or forfeiture
of such Restricted Stock Unit under the terms of the Plan.

 

4.5                               Share Issuance; Voting Rights; Dividends.

 

(a)                                 No shares of Common Stock shall be issued
under this Plan. This Plan is a Qualifying Plan under the Long-Term Incentive
Plan and any successor plan.  Any shares of Common Stock issued as the result of
the vesting of a Restricted Stock Unit shall be paid out of the Long-Term
Incentive Plan.

 

(b)                                 No Participant shall have any voting rights,
rights to dividend payments, or any other rights of a holder of Common Stock
merely because the Participant is granted a Restricted Stock Unit under this
Plan.

 

4.6                               Termination of Employment; Change of Control;
Death.

 

(a)                                 Except as otherwise provided in Sections
4.6(b) through (e), in the event of Termination of Employment of a Participant,
all unvested Restricted Stock Units held by the Participant on the date of
Termination of Employment and all related rights (including Dividend Equivalent
Rights) shall be forfeited, unless otherwise expressly provided by the
Committee.

 

(b)                                 In the event of Termination of Employment by
reason of a Participant’s Retirement or Early Retirement, the Committee (or CEO)
or its (the CEO’s) designee in the sole discretion of either may provide, before
the Participant’s Retirement or Early Retirement, that any or all unvested
Restricted Stock Units held by the Participant shall immediately vest on the
Participant’s date of Retirement or Early Retirement and shall be paid in
accordance with Section 4.4.

 

(c)                                  In the event of Termination of Employment
by reason of a Participant’s Disability, all unvested Restricted Stock Units as
of the date of such event shall immediately vest and shall be paid in accordance
with Section 4.4.

 

(d)                                 In the event of a Participant’s Termination
Upon a Change of Control, all unvested Restricted Stock Units as of the
Termination date shall immediately vest and shall be paid in accordance with
Section 4.4.

 

(e)                                  In the case of the death of a Participant,
all unvested Restricted Stock Units as of the date of death shall immediately
vest and all vested but unpaid Restricted Stock Units shall be paid in
accordance with Section 4.4.

 

4.7                               Leave of Absence.  Unless otherwise determined
by the Committee or its designee with respect to Restricted Stock Units granted
to non-US Individuals that are not subject to the requirements of Code
Section 409A, any and all Restricted Stock Units granted hereunder shall

 

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become vested and payable on the date (or dates) specified in the applicable
grant document, regardless of whether the Participant is on an approved leave of
absence on such date (or dates).

 

ARTICLE 5

Antidilution Provisions

 

Except as otherwise expressly provided herein, the following provisions shall
apply to all Restricted Stock Units granted under this Plan:

 

5.1                               Stock Dividends, Splits, Etc.  In the event of
a stock dividend, stock split, or other subdivision or combination of the Common
Stock, the number of Restricted Stock Units granted under this Plan and that are
outstanding on the date of such an event will be adjusted proportionately to
maintain the Restricted Stock Unit to share ratio described in Section 4.1.

 

5.2                               Merger, Exchange or Reorganization.  In the
event that the outstanding shares of Common Stock are changed or converted into,
exchanged or exchangeable for, a different number or kind of shares or other
securities of Cigna Corporation or of another corporation, by reason of a
reorganization, merger, consolidation, reclassification or combination,
appropriate adjustment shall be made by the Committee in the number and kind of
shares that will be paid with respect to outstanding Restricted Stock Units that
have been granted under this Plan, to the end that the proportionate interests
of Participants shall be maintained as before the occurrence of such event;
provided, however, that in the event of any contemplated transaction which may
constitute a Change of Control of Cigna Corporation, the Committee, with the
approval of a majority of the members of the Board of Directors, may modify any
and all outstanding Restricted Stock Units so as to accelerate, as a consequence
of or in connection with such transaction, the vesting of such Restricted Stock
Units. Any Restricted Stock Units subject to this Section 5.2 shall be paid in
accordance with Section 4.4.

 

ARTICLE 6

Administration of Plan

 

6.1                               General Administration.  The Plan is to be
administered by the Committee, subject to such requirements for review and
approval by the Board of Directors as the Board of Directors may establish.

 

6.2                               Administrative Rules.  The Committee shall
have full power and authority to adopt, amend and rescind administrative
guidelines, rules and regulations pertaining to this Plan and to interpret the
Plan and rule on any questions respecting any of its provisions, terms and
conditions.

 

6.3                               Decisions Binding.  All decisions of the
Committee concerning this Plan shall be binding on Cigna Corporation and its
Subsidiaries and their respective boards of directors, and on all Participants
and other persons claiming rights under the Plan.

 

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6.4                               Section 409A Compliance.  It is intended that
the Plan comply with the requirements of Code Section 409A, and the Plan shall
be so administered and interpreted.

 

ARTICLE 7

Amendments

 

All amendments to this Plan shall be in writing and shall be effective when
approved by the Board of Directors. Unless otherwise expressly provided by an
amendment or the Board of Directors, no amendment to this Plan shall apply to
Restricted Stock Units granted before the effective date of the amendment. A
Participant’s rights with respect to outstanding Restricted Stock Units may not
be abridged by any amendment, modification or termination of the Plan without
the Participant’s individual consent.

 

ARTICLE 8

Other Provisions

 

8.1                               Duration of the Plan.  The Plan shall remain
in effect until all Restricted Stock Units covered by or granted under this Plan
have been paid or forfeited under the terms of this Plan.

 

8.2                               Early Termination.  Notwithstanding the
provisions of Section 8.1, the Board of Directors may terminate this Plan at any
time; but no such action by the Board of Directors shall adversely affect the
rights of Participants which exist under this Plan immediately before its
termination.

 

8.3                               Awards Not Assignable.  Except as otherwise
permitted by applicable law, no Restricted Stock Unit or any rights related to a
Restricted Stock Unit, including any right to receive any payment under this
Plan, shall be assignable or transferable by a Participant except by will or by
the laws of descent and distribution.  Any other attempted assignment or
alienation shall be void and of no force or effect.

 

8.4                               Withholding Taxes.  Upon the vesting or
payment of any Restricted Stock Unit or portion thereof described in Article 4,
the Company shall have the right at its option to:

 

(a)                                 require the Participant (or personal
representative or beneficiary) to remit an amount sufficient to satisfy any
legally required withholding taxes; or

 

(b)                                 deduct, from any amount payable, the amount
of any taxes the Company may be required to withhold with respect to such
transaction.

 

The Committee may require the Participant to remit such amount in whole or in
part in Common Stock. The Committee may establish such additional conditions as
it deems appropriate.  If the Participant remits such amount in Common Stock,
the number of shares of Common Stock delivered to or on behalf of a Participant
shall be reduced by the number of shares so remitted.  Common Stock so remitted
shall be valued using the Fair Market Value of Common Stock as of the date the
withholding obligation arises.

 

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8.5                               Participant’s Rights Unsecured.  The right of
any Participant to receive future payments under the provisions of the Plan
shall be an unsecured claim against the general assets of the Company.

 

8.6                               Future Participation Not Guaranteed. 
Participation in the Plan with respect any one or more grants of Restricted
Stock Units is not in and of itself to be construed as evidence of a right to
receive any subsequent Restricted Stock Unit grant.

 

8.7                               Termination of Employment.  Cigna Corporation
and each Subsidiary retain the right to terminate the employment of any employee
at any time for any reason or no reason, and a Restricted Stock Unit grant under
the Plan to a Participant is not, and shall not be construed in any manner to
be, a waiver of such right.

 

8.8                               Successors.  Any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of Cigna Corporation, shall assume
the liabilities of Cigna Corporation under this Plan and perform any duties and
responsibilities in the same manner and to the same extent that Cigna
Corporation would be required to perform if no such succession had taken place.

 

8.9                               Construction.  The terms used in this Plan
shall include the feminine as well as the masculine gender and the plural as
well as the singular, as the context in which they are used requires.

 

8.10                        Severability.  If any provisions of the Plan, or any
Restricted Stock Unit grant made under the Plan, is held to be invalid, void or
unenforceable, the validity of any other provision of the Plan or grant made
under the Plan shall not be affected.

 

8.11                        Interpretation.  All statutory or regulatory
references in this Plan shall include successor provisions.

 

8.12                        Controlling Law.  This Plan shall be construed and
enforced according to the laws of the State of Delaware, without regard to
Delaware conflict of laws rules, to the extent not preempted by federal law,
which shall otherwise control.

 

8.13                        Limitation under the Cigna Executive Severance
Benefits Plan. If some or all of a Participant’s awards or rights under this
Plan, including without limitation, the accelerated vesting of a Participant’s
outstanding Restricted Stock Units in the event of a Termination Upon a Change
of Control, are required to be cancelled, limited or reduced under the Cigna
Executive Severance Benefits Plan (the “Executive Severance Plan”), then such
reduction, limitation or cancellation shall be applied in the manner and to the
extent determined under the Executive Severance Plan, notwithstanding any other
provisions of this Plan.

 

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