Exhibit 10.12
AMENDMENT 2 TO EMPLOYMENT AGREEMENT
     AMENDMENT dated as of January 3, 2006 (“Amendment”) to that certain
Employment Agreement (“Agreement”) dated as of September 6, 2000 by and between
Aetna Inc., a Pennsylvania corporation, and John W. Rowe, M.D. (“Executive”) as
amended as of June 27, 2003 (certain capitalized terms used herein being defined
in Article 7 of the Agreement).
     WHEREAS, the Board and the Executive desire to plan for a successful
transition of responsibilities and to amend the Agreement on the terms and
conditions set forth below;
     WHEREAS, the Company and Executive desire to enter into this Amendment
embodying the terms of such extension and amendment;
     NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements of the parties set forth in this Amendment, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
     1. Section 1.01 of the Agreement shall be deleted and replaced in its
entirety as follows:
“SECTION 1.01. Position. On February 14, 2006 Executive’s title and job
responsibilities shall be that of an executive officer Chairman of the Board.”
     2. Section 2 of the Amendment dated as of June 27, 2003 shall be deleted
and replaced in its entirety as follows:
“Effective July 7, 2003, Executive’s Base Salary as referred to in Section 2.01
shall be increased by $100,000 to the annual rate of $1,100,000, payable in
accordance with the payroll and administrative practices of the Company from
time to time; provided, however, that such increase and any future increases
shall be mandatorily deferred (but nevertheless remain eligible for benefits)
until the later of (i) the date on which said amounts would be deductible by the
Company under IRC Section 162(m), and (ii) the date or dates elected by
Executive prior to the effective date of such increase (subject to the
requirements of IRC Section 409A as applicable), but with respect to any salary
above $1,000,000 earned on or after January 1, 2005, no date earlier than six
months following Executive’s termination of employment, and said deferrals shall
earn a rate of return in accordance with the Company’s deferral program
applicable to the Company’s senior executive officers in effect from time to
time.”
     3. Section 6.15(b) of the Employment Agreement shall be modified as
follows: each reference to “two years after the termination of the Employment
Term” shall be replaced with the phrase “three years after the termination of
the Employment Term”, so that the two year nonsolicitation provisions contained
therein shall be extended to three years. Similarly, Section 6.15(c)(i) of the
Employment Agreement shall be modified to replace the reference to “one year
after the termination of the Employment Term” with the phrase “three years after
the termination of the Employment Term”, so that the one year non-compete
provision contained therein shall be extended to three years. In consideration
of these extensions, the Company shall pay the Executive on each of first,
second and third anniversaries of his termination of employment due to
“Retirement” the amount of $150,000. The phrase “Retirement” as used herein
shall mean termination of employment by Executive provided that the Executive’s
age and completed years of service total 65 or more points at such termination.
In addition, if Executive’s Consultancy pursuant to Section 5 of the Consulting
Agreement (described below) is extended for either one or two years past the
initial three-year term of the consultancy, the Executive shall be entitled to
an additional $150,000 (payable on the fourth and fifth anniversary of his
termination of employment due to Retirement) in consideration for each year in
which the nonsolicitation and non-compete covenants contained in

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Section 6.15(b) and 6.15(c)(i) of the Employment Agreement are renewed
concurrent with the renewal (if any) of the Consultancy term. Notwithstanding
anything herein to the contrary, should the non-compete agreement described in
this Section 3 be terminated prior to the time any annual $150,000 payment is
due, the Company shall pay the Executive a pro-rated amount for each full month
for which the Executive was subject to the non-compete during such annual
period. For avoidance of doubt, the parties agree that this Section 3 of the
Amendment 2 to the Employment Agreement, together with Sections 6.15 and 6.16 of
the Employment Agreement, shall survive the Executive’s termination of
employment and expiration of the Employment Term.
     4. Effective upon the termination of the Executive’s employment due to
Retirement, the Company agrees to enter into a Consulting Agreement on the
terms, conditions and in the form attached hereto as Exhibit A which is
incorporated herein and made a part hereof.
     5. In the event the Executive terminates his employment due to Retirement
prior to the end of a fiscal year, he shall be entitled to a pro-rata annual
bonus for performance related to such fiscal year, calculated (consistent with
historical practices) and paid at the same time as the Company makes such
calculations and payments to other senior executives of the Company.
     6. Upon Executive’s Retirement, the parties agree that all rights and
obligations contained in the Agreement shall be extinguished, except as provided
in this Amendment 2 and as provided in Sections 5.01 (Successors), 5.02
(Assignment by Executive), 6.02 (Legal Fees and Expenses), 6.03 (Arbitration),
6.05 (Non-Exclusivity of Benefits), 6.07 (Mitigation), 6.12 (Governing Law),
6.14 (Indemnification), 6.15 (Nondisclosure, Nonsolicitation, Noncompete, and
Nondisparagement) and 6.15 (Material Inducement; Specific Performance), all of
which shall survive the Executive’s termination of employment and expiration of
the Employment Term until the later of (i) the three year anniversary from date
of Executive’s termination of employment, and (ii) the expiration of the
Consultancy term.
     7. Notwithstanding anything to the contrary, to the extent necessary to
comply with Section 409A of the Internal Revenue Code, payments to be made
following termination of employment and entry into the Consulting Agreement
shall not be paid until the six month anniversary of the Consultant’s
termination of employment.
     Except as modified above, all of the provisions, terms and conditions of
the Agreement remain in full force and effect.
     IN WITNESS WHEREOF, the Company and Executive have executed this Amendment,
to be effective as of the day and year first written above.

                  JOHN W. ROWE, M.D.       AETNA INC.
 
               
/s/ John W. Rowe
 
      By:   /s/ Elease E. Wright
 
Elease E. Wright    
 
          Title: Senior Vice President HR    

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Exhibit A: Form of Consulting Agreement
Exhibit A
CONSULTING AGREEMENT
     This Consulting Agreement (this “Agreement”) is made as of the
                     day of                     , 2006, by and between Aetna
Inc. (“Company”) and John W. Rowe, M.D. (“Consultant”). The parties hereto agree
as follows:
     1. Engagement. Company hereby engages Consultant and Consultant hereby
agrees to render at the request of the Company’s Chief Executive Officer or
Board of Directors, upon reasonable notice, independent consulting services for
Company on matters of an executive and/or high level nature, including but not
limited to design and analysis of Company’s experience with various products and
strategies including consumer-directed health plans, Aexcel networks, Chairman
initiatives, Medicare, pharmaceutical programs, wellness programs, and other
business matters as agreed by the parties. At the Company’s request, Consultant
will collaborate with the Company on presentation and publication of the results
of these analyses for use by the Company, internally or externally. In addition,
at the Company’s request, Consultant shall serve as a director of the Aetna
Foundation, Inc. and continue to participate in specific community activities,
including Board-related service, as requested by Company and agreed to by
Consultant. In this engagement and all activities hereunder, Consultant shall
serve as an independent contractor and not an employee of Company, as further
explained in Section 6 below.
     2. Term. The term of this Agreement shall begin as of
[                    , 2006] and shall terminate on [                    ,
2009], unless terminated earlier or extended pursuant to Section 5 of this
Agreement.
     3. Compensation. As compensation for all services rendered by Consultant
under this Agreement, Company shall pay Consultant at a per diem rate of $4,000
per day and at $2,000 per half-day for consulting services excluding any
community-related efforts or service as a board director of a charitable or
not-for-profit entity, subject to the provisions of Section 5 of this Agreement.
All such compensation shall be payable without deduction, including no deduction
for federal income, social security, or state income taxes. All applicable taxes
shall be the responsibility of Consultant. Company also shall pay all
travel-related expenses of Consultant for such consulting services including all
community-related efforts performed at Company’s and/or Aetna Foundation Inc.’s
request. In connection with any consulting assignment hereunder, (i) Consultant
shall have full access (on the same basis then applicable to senior executives
of the Company) to the Company’s travel facilities (e.g., car, driver, aircraft
and helicopter services), (ii) Company shall provide an office with appropriate
support services for Consultant at Company’s facilities in either New York or
Boston (at Consultant’s election), unless Consultant assumes another
professional position that provides office and support services, provided,
however, that if Company does not maintain facilities in the city in which
Consultant desires to work, it shall provide Consultant facilities at another
location in such city, and (iii) Company shall provide Consultant with computers
(including upgrades), software, printers, monitors and access to information
technology and communications support staff (on the same basis as such items and
support are made available to senior executives of the Company) in his office
and at his two principal residences.
     4. Performance of Duties. Consultant shall render services conscientiously
and shall devote his best efforts and abilities thereto, at such times during
the term hereof, and in such manner, as Company and Consultant shall mutually
agree, not to exceed 25 full days per calendar quarter, it being acknowledged
that Consultant’s services shall be performed at such places and at such times
as are reasonably convenient to Consultant, upon reasonable notice. Consultant
shall observe all policies and directives promulgated from time to time by
Company.

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     5. Termination. This Agreement will terminate by either party upon
reasonable notice to the other. This Agreement also will terminate on
Consultant’s death or, upon Consultant’s acceptance of an academic or government
position, upon Consultant’s request. The term of this Agreement may be extended
for two additional one-year periods on the same terms and conditions upon mutual
agreement of Consultant and Company. Consultant’s obligations under Section 7
(Confidential Information), Section 8 (Return of Confidential Information and
Other Company Property), Section 9 (Rights of Authorship), Section 10 (Remedy),
Section 11 (Arbitration) and Section 12 (Miscellaneous) shall survive
termination hereof.
     6. Independent Contractor. It is expressly agreed that Consultant is acting
as an independent contractor in performing services hereunder. Company shall
carry no workers’ compensation insurance or any health or accident insurance
(other than standard Aetna retiree medical care benefits to which the Consultant
is otherwise entitled) to cover Consultant. Company shall not pay any
contributions to Social Security, unemployment insurance, federal or state
withholding taxes, nor provide any other contributions or benefits that might be
expected in an employer-employee relationship. Company shall, however, pay all
expenses associated with the arrangement contemplated herein, including but not
limited to advice, consulting, negotiation and preparation of documents
memorializing such arrangement.
     7. Confidential Information. Consultant desires to act as a consultant to
Company and he understands and agrees that his duties for the Company in the
past have required, and his consulting duties may require, access to
Confidential Information of a competitive nature, which Company makes available
only to select persons who have a need to know such confidential information,
and/or information subject to the attorney-client and work product privileges.
Consultant understands and agrees that for purposes of this Agreement,
“Confidential Information” includes all trade secrets and all information
furnished by Company to Consultant, or to which Consultant gains access during
the course of his or her consulting relationship with Company, which is either
non-public, confidential or proprietary in nature, including, but not limited to
financial statements, client lists or information, supplier lists or
information, subcontractor lists or information, prospect lists or information,
information pertaining to Company’s channels of distribution, marketing, work
product, pricing policy and records, sales representative commission policy,
sales volume by products, customer or geographic area, personnel history,
accounting procedures, invoice forms, contracts, leases, business plan,
information about the structure and marketing of the Company’s products and
policies, revenue and/or commission information, commission percentages, rating
discounts and/or client costs, products, inventions, services, pricing,
databases, lead generation sources, debt information, employment manuals,
employee benefit cards, employee benefit statements, computer systems, software,
computer hardware, computer codes, passwords, programs and formula, technology,
designs, secret processes, proprietary or technical information, procedures or
manuals, trademarks or copyrighted material in use or under consideration for
use, together with analyses, proposals, compilations, forecasts, studies, or
other documents or work product prepared by Company, its agents, representatives
(including attorneys, accountants and financial advisors) or employees which
contain or otherwise reflect such information. Consultant will not retain, use
or disclose, directly or indirectly, any of Company’s Confidential Information.
Consultant recognizes that this Confidential Information is a unique asset of
Company, developed and perfected over a considerable time and at substantial
expense to Company and the disclosure of which may cause injury, loss of profits
and loss of goodwill to Company. Consultant agrees to protect the
confidentiality of all Confidential Information during the term of this
Agreement and thereafter. Consultant agrees to keep all documents containing or
referring to Confidential Information in secure locations and not to duplicate,
use or reveal to third parties any Confidential Information except as necessary
for the business purposes of Company. Consultant agrees to inform all other
persons to whom the Confidential Information might be disclosed or made
available of Company’s proprietary interest and of the recipient’s obligations
under this Agreement and to take such other protective measures as may be or
become reasonably necessary to preserve the confidentiality of such Confidential
Information. Notwithstanding the foregoing, however, “Confidential Information”
shall not include such information that the Consultant is required by law or a
governmental agency to disclose, or information that has come into the public
domain by means other than breach of this Agreement.

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     8. Return of Confidential Information and Other Company Property.
Consultant acknowledges that all papers, photographs and apparatus related to
the business of Company, including those prepared or made by Consultant,
including but not limited to the Confidential Information, shall be and remain
at all times the property of Company. When the consulting relationship with the
Company terminates for any reason, or upon request by Company, Consultant will
promptly deliver (within five calendar days) to Company all of Consultant’s
files and copies thereof and other property of Company in the Consultant’s
possession, including but not limited to any security pass or ID card, pagers,
voice mail passwords or passcodes, company credit card, keys, computer disks and
software, work product, brochures or customer data, all originals and copies of
the Confidential Information and all originals and copies of documents relating
to the Confidential Information.
     9. Rights of Authorship. Consultant acknowledges that all original works of
authorship that are made by him (solely or jointly with others) within the scope
of this Agreement and which are protectable by copyright are “works made for
hire” as that term is defined in the United States Copyright Act (17 U.S.C.,
Section 101).
     10. Remedy. Consultant understands that Company would not have any adequate
remedy at law for the material breach or threatened breach by the Consultant of
Sections 7 (Confidential Information), 8 (Return of Confidential Information and
Other Company Property) or 9 (Rights of Authorship) of this Agreement, and
agrees that in the event of any such material breach or threatened breach,
Company may, in addition to the other remedies which may be available to it,
file a suit in equity to enjoin Consultant from the breach or threatened breach
of such covenant(s).
     11. Arbitration. Any matter, controversy or claim arising out of or
relating to this Agreement or to any breach of this Agreement, except claims set
forth in Section 10 of this Agreement, as to which Company has elected to seek a
court remedy, shall be settled by arbitration before one arbitrator in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgments on the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. Each party shall pay: the fees
of his or its attorneys; the expenses of his or its witnesses; and all other
expenses connected with presenting his or its case. Other costs of the
arbitration, including the cost of any record or transcripts of the arbitration
hearing, administrative fees, the fees of the arbitrator, and all other fees and
costs shall be borne equally by the parties.
     12. Miscellaneous.
          (a) Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered or
certified mail to Company or Consultant at the address set forth below to such
other address as they shall notify each other in writing.
If to Company:
Chief Executive Officer
Aetna Inc.
151 Farmingdale Avenue
Hartford, CT 06156
With a copy to:
General Counsel
Aetna Inc.
151 Farmington Avenue
Hartford, CT 06156
          If to Consultant: at Consultant’s last known address as reflected on
the books and records of the Company

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With a copy to:
Pearl Meyer & Partners
445 Park Avenue
New York, NY 10022
          (b) Assignment. This Agreement shall be binding upon and inure to the
benefit of Company and its successors and assigns. This Agreement shall not be
assignable by Consultant.
          (c) Applicable Law. This Agreement shall be construed in accordance
with the laws of the State of Connecticut in every respect, without regard to
its rules regarding conflicts of law.
          (d) Headings. Section headings and numbers herein are included for
convenience of reference only and this Agreement is not to be construed with
reference thereto. If there is any conflict between such numbers and headings
and the text hereof, the text shall control.
          (e) Severability. If for any reason any portion of this Agreement
shall be held invalid or unenforceable, the parties agree that it is their
intent that such provision shall be enforced to the maximum extent possible
under applicable law, and that the court or arbitrator shall reform such
provision to make it enforceable in accordance with the intent of the parties,
and that notwithstanding such invalidity, unenforceability or reformation of any
provision, the remaining provisions of this Agreement shall remain in full force
and effect.
          (f) Entire Agreement. This Agreement contains the entire agreement of
the parties with respect to the subject matter hereof and supersedes all
previous agreements between the parties, provided, however, that the parties
acknowledge that certain provisions of the Employment Agreement dated as of
September 6, 2000, as amended, may remain in effect as provided in such
agreement and amendments thereto, during all or a portion of the term of this
Agreement. No officer, employee, or representative of Company has any authority
to make any representation or promise in connection with this Agreement or the
subject matter hereof that is not contained herein, and Consultant represents
and warrants that he has not executed this Agreement in reliance upon any such
representation or promise. No modification, extension or renewal of this
Agreement shall be valid unless made in writing and signed by the parties
hereto.
          (g) Waiver of Breach. The waiver by Company of a breach of any
provision of this Agreement by Consultant shall not operate or be construed as a
waiver of any subsequent breach by Consultant.
          (h) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one agreement.

                      Aetna Inc.       John W. Rowe, M.D.    
 
                   
By:
                                     
Its:
                   
 
                   
Date:
 
 
      Date:        
 
             
 
   

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