Exhibit 10.23

 

CIGNA EXECUTIVE SEVERANCE BENEFITS PLAN

(Amended and Restated Effective October 23, 2018)

 

ARTICLE 1

Definitions

 

The following are defined terms wherever they appear in this Plan.

 

1.1                               “Accounting Firm” — a nationally recognized
accounting firm that shall be designated by Cigna that is responsible for the
calculations and determinations under Section 3.6 of the Plan.

 

1.2                               “Affiliate” — the meaning set forth in
Rule 12b-2 promulgated under the Exchange Act.

 

1.3                               “Basic Severance Pay” — the severance pay
described in Section 3.2 of the Plan.

 

1.4                               “Beneficial Owner” and “Beneficially Owned” —
the meaning set forth in Rule 13d-3 promulgated under the Exchange Act.

 

1.5                               “Board” — the Board of Directors of Cigna
Corporation or a successor.

 

1.6                               “Cigna” — Cigna Corporation, a Delaware
corporation, its subsidiaries, successors and predecessors.

 

1.7                               “Change of Control” — any of the following:

 

(a)                                 A corporation, Person or group acting in
concert, as described in Exchange Act Section 14(d)(2), holds or acquires
beneficial ownership within the meaning of Rule 13d-3 promulgated under the
Exchange Act of a number of preferred or common shares of Cigna Corporation
having 25% or more of the combined voting power of Cigna Corporation’s then
outstanding securities; or

 

(b)                                 There is consummated a merger or
consolidation of Cigna Corporation or any direct or indirect subsidiary of Cigna
Corporation with any other corporation, other than:

 

(i)            a merger or consolidation immediately following which the
individuals who constituted the Board immediately prior thereto constitute at
least a majority of the board of directors of the entity surviving such merger
or consolidation or the ultimate parent thereof, or

 

(ii)           a merger or consolidation effected to implement a
recapitalization of Cigna Corporation (or similar transaction) in which no
Person is or becomes the Beneficial Owner, directly or indirectly, of securities
of Cigna Corporation (not including in the securities Beneficially Owned by such
Person any securities acquired directly from Cigna Corporation or its
Affiliates) representing 25% or more of the combined voting power of Cigna
Corporation’s then outstanding securities;

 

(c)                                  A change occurs in the composition of the
Board at any time during any consecutive

 

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24-month period such that the Continuity Directors cease for any reason to
constitute a majority of the Board.  For purposes of the preceding sentence
“Continuity Directors” shall mean those members of the Board who either:
(1) were directors at the beginning of such consecutive 24-month period; or
(2) were elected by, or on nomination or recommendation of, at least a majority
of the Board (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of
Cigna Corporation); or

 

(d)                                 The shareholders of Cigna Corporation
approve a plan of complete liquidation or dissolution of Cigna Corporation or
there is consummated an agreement for the sale or disposition by Cigna
Corporation of all or substantially all of Cigna Corporation’s assets, other
than a sale or disposition by Cigna Corporation of all or substantially all of
Cigna Corporation’s assets immediately following which the individuals who
constituted the Board immediately prior thereto constitute at least a majority
of the board of directors of the entity to which such assets are sold or
disposed or any parent thereof.

 

Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of Cigna Corporation immediately prior to such transaction or
series of transactions continue to have substantially the same proportionate
ownership in an entity which owns all or substantially all of the assets of
Cigna Corporation immediately following such transaction or series of
transactions.

 

1.8                               “Code” — the Internal Revenue Code of 1986, as
amended.

 

1.9                               “Committee” — the People Resources Committee
of the Board, or a successor committee.

 

1.10                        “Covered Executive” — any individual in an executive
role as determined by Cigna in its sole discretion and who is employed by Cigna
Corporation or any of its subsidiaries on the date immediately prior to the date
a Change of Control occurs.  In the event a Change of Control occurs prior to
January 1, 2019, Cigna shall determine whether an individual is an executive
role based on that individual’s anticipated role under Cigna’s career
architecture effective as of January 1, 2019.

 

1.11                        “Covered Band 6 Executive” — a Covered Executive
aligned to Career Band 6.

 

1.12                        “Covered Band 7 Executive” — a Covered Executive
aligned to Career Band 7.

 

1.13                        “Covered Senior Executive” — a Covered Executive who
is also an “executive officer” as defined in Rule 3b-7 promulgated under the
Exchange Act on.

 

1.14                        “Excess Parachute Payments” — the meaning set forth
in Code Section 280G.

 

1.15                        “Exchange Act” — the Securities Exchange Act of
1934, as amended.

 

1.16                        “Excise Tax” — any excise tax under Code
Section 4999 for any Excess Parachute Payments and any similar tax.

 

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1.17                        “LTIP” — the Cigna Long-Term Incentive Plan, amended
and restated as of April 26, 2017, or any predecessor or successor plan.

 

1.18                        “Parachute Payments” — the meaning set forth in Code
Section 280G(b)(2).

 

1.19                        “Participant” — a Covered Executive who meets the
eligibility requirements in Article 2.

 

1.20                        “Person” — the meaning given in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (a) Cigna Corporation or any of its
Subsidiaries, (b) a trustee or other fiduciary holding securities under an
employee benefit plan of Cigna Corporation or any of its Affiliates, (c) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (d) a corporation owned, directly or indirectly, by the
stockholders of Cigna Corporation in substantially the same proportions as their
ownership of stock of Cigna Corporation.

 

1.21                        “Plan” — the Cigna Executive Severance Benefits Plan
(Amended and Restated Effective October 23, 2018), as it may be amended from
time to time.

 

1.22                        “Separated Participant” — a Participant who has had
a Separation upon a Change of Control.

 

1.23                        “Separation Date” — the date of a Participant’s
Separation from Service.

 

1.24                        “Separation for Cause” — a Separation from Service
initiated by Cigna on account of the conviction of an employee of a felony
involving fraud or dishonesty directed against the Company.

 

1.25                        “Separation from Service” — a Participant’s death,
retirement or other termination of employment, from the Participant’s employer
or service recipient within the meaning of Treasury Regulation
Section 1.409A-1(h). For this purpose, the level of reasonably anticipated,
permanently reduced, bona fide services that will be treated as a Separation
from Service is 30%.  Generally, a Participant’s Separation from Service occurs
when the Participant’s level of services to Cigna Corporation and its affiliates
is reduced by 70% or more.

 

1.26                        “Separation upon a Change of Control” — a Separation
from Service within two (2) years following a Change of Control (a) initiated by
Cigna or a successor, other than a Separation for Cause, or (b) initiated by the
Participant after determining in the Participant’s reasonable judgment that
there has been a material reduction in the Participant’s authority, duties or
responsibilities, any reduction in the Participant’s compensation, or any
changes caused by Cigna or successor in the Participant’s principle office
location of more than thirty-five (35) miles from its location on the date of
the Change of Control.  Participant shall have notified the Executive Vice
President — Human Resources and Services in writing that he or she has
experienced such a reduction or change, and shall describe the event that he or
she believes constitutes such a reduction or change.  The written notice and
explanation must be delivered within 30 calendar days after such reduction or
change and at least 30 days before Separation Date.  Cigna shall have 30 days
following receipt of the written notification to remedy the conditions causing
the event before Participant may have a Separation upon a Change of Control
under Section 1.26(b).

 

1.27                        “Supplemental Severance Pay” — the severance pay
described in Section 3.3 of the Plan.

 

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1.28                        “Subsidiary” — a corporation (or a partnership,
joint venture or other unincorporated entity) of which more than 50% of the
combined voting power of all classes of stock entitled to vote (or more than 50%
of the capital, equity or profits interest) is owned directly or indirectly by
Cigna Corporation; provided that such corporation (or other entity) is included
in Cigna Corporation’s consolidated financial statements under generally
accepted accounting principles.

 

1.29                        “Total Payments” — the sum of all payments to be
made to a Participant under this Plan or under any other plan, arrangement or
agreement resulting from or relating in any way to a Change of Control.

 

ARTICLE 2

Eligibility

 

2.1                               Covered Executives.  Subject to the limits in
Section 2.2, any Covered Executive shall be eligible for benefits under this
Plan.

 

A Covered Executive who has any outstanding grants or awards under the LTIP as
of October 23, 2018 will be eligible for the benefits described in Article 3
only if he or she agrees to the application of the limitation on payments
provisions under Section 3.6 of this Plan to such LTIP grants and awards.

 

2.2                               Coordination of Benefits.  A Covered Executive
who is party to an individual agreement with Cigna that provides severance
benefits and who qualifies for severance benefits under both the agreement and
this Plan shall receive the greater of the severance benefits provided under the
agreement or this Plan, but not both.

 

ARTICLE 3

Benefits

 

3.1                               Separation Upon a Change of Control.  Cigna
shall pay severance pay and other payments and benefits to a Separated
Participant in accordance with the provisions of this Article 3.

 

3.2                               Basic Severance Pay.  A Separated
Participant’s Basic Severance Pay shall be calculated and paid as follows:

 

(a)                                 Basic Severance Pay shall equal the
Separated Participant’s base salary rate, stated in weekly terms, multiplied by
156 weeks for Covered Senior Executives, 104 weeks for Covered Band 7 Executives
and 52 weeks for Covered Band 6 Executives.  The “base salary rate” shall be the
Separated Participant’s base salary rate immediately before the Separation Date
or on the date of the applicable Change of Control, whichever rate is higher.

 

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(b)                                 Cigna shall pay Basic Severance Pay to a
Separated Participant in a single lump sum, less applicable withholding, in the
seventh (7th) calendar month following the Separation Date.

 

3.3                               Supplemental Severance Pay.

 

(a)                                 A Separated Participant’s Supplemental
Severance Pay shall be the product of the Base Amount described in paragraph
3.3(b) and the applicable Multiplier described in paragraph 3.3(c).

 

(b)                                 The Base Amount shall be the higher of:

 

(1)                                 the last incentive compensation payment
under the Cigna Management Incentive Plan (MIP) actually received by the
Separated Participant; or

 

(2)                                 the amount of the Target Award that was
applicable to the Separated Participant immediately preceding the Change of
Control.  “Target Award” means the target bonus award established by the Board
or Committee or EVP, Human Resources and Services for determining appropriate
levels of incentive compensation payments under the MIP.

 

(c)                                  The Multiplier shall be:

 

(1)                                 300% for Covered Senior Executives;

 

(2)                                 200% for Covered Band 7 Executives; and

 

(3)                                 100% for Covered Band 6 Executives.

 

(d)                            Cigna shall pay Supplemental Severance Pay to a
Separated Participant in a single lump sum, less applicable withholding, in the
seventh (7th) calendar month following the Separation Date.

 

3.4                               Outplacement.  During the six-month period
beginning on a Participant’s Separation Date, Cigna will provide the Separated
Participant with reasonable outplacement services.

 

3.5                               Post-Separation Insurance Coverage.  Cigna
shall provide a Separated Participant with continued Basic Life Insurance Plan
coverage at Cigna’s expense for the 12-month period starting on the first day of
the month following Participant’s Separation Date.

 

3.6                               Limitation on Payments.

 

(a)                                 Notwithstanding any other provision of this
Plan, if the Accounting Firm determines that all or part of the Total Payments
to be made to a Participant would, but for this Section 3.6, be subject to the
Excise Tax, then the amount of Total Payments payable to the Participant will be
either (i) delivered in full or (ii) reduced (but not below zero) by the minimum
amount necessary so that no such payments will be subject to the Excise Tax;
whichever, after taking into account all applicable taxes (including any Excise
Tax),

 

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results in the receipt by the Participant, on an after-tax basis, of the
greatest amount of benefits, notwithstanding that all or some portion of such
Total Payments may be subject to the Excise Tax.

 

(b)                                 The Accounting Firm shall make all
determinations required under this Section 3.6, including whether and when any
payments would be subject to the Excise Tax, the amount of any payments subject
to the Excise Tax, whether the Total Payments should be reduced and the amount
of the reduction pursuant Section 3.6(a).  For purposes of making these
calculations, the Accounting Firm may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable,
good-faith interpretations concerning the application of the Code.

 

(c)                                  If the determination made pursuant to
Section 3.6(a) results in a reduction of a Participant’s Total Payments, then
the reduction shall be applied to payments that constitute Parachute Payments in
the following order and shall be implemented in a manner consistent with the
requirements of Code Section 409A:

 

(1)                                 to Strategic Performance Share awards under
LTIP (beginning with awards for the latest performance period and working
backward);

 

(2)                                 to Basic and Supplemental Severance Pay
under this Plan;

 

(3)                                 by cancellation of equity-based awards the
grant of which is considered “contingent” upon the Change in Control with the
meaning of Code Section 280G (if applicable);

 

(4)                                 by cancellation of accelerated vesting of
other equity-based awards (if applicable);

 

(5)                                 by reduction of all other payments, if any;
and

 

(6)                                 by reduction of employee benefits.

 

If the grant or acceleration of vesting of equity-based awards is to be
cancelled, such cancellation shall first be applied to awards for which the
exercise or purchase price exceeds the fair market value of the underlying
shares at the time of the Change in Control, if any, and then to the remaining
awards. In each case, cancellation shall be applied based on the reverse order
of the date of grant of the applicable awards.

 

(d)                                 The fact that the limitations contained in
this Section 3.6 reduce a Participant’s right to payments or benefits will not
of itself limit or otherwise affect any other rights of the Participant under
this Plan or any other agreement or arrangement.  Nothing in this Section 3.6
shall require Cigna to be responsible for, or have any liability or obligation
with respect to, a Participant’s Excise Tax liabilities.

 

(e)                                  If the amount of the Total Payments to a
Participant is reduced under Section 3.6(a) and the Internal Revenue Service
(“IRS”) nonetheless determines that a Participant is liable for the Excise Tax
as a result of the receipt of any portion of the Total Payments, then the

 

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Participant shall be obligated to pay back to the Company, within thirty (30)
days after a final IRS determination or in the event that the Participant
challenges the final IRS determination, a final judicial determination, a
portion of such amounts equal to the “Repayment Amount”.  For this purposes the
Repayment Amount will be the smallest such amount as shall be required to be
paid to the Company so that none of the remaining Total Payments is subject to
the Excise Tax.

 

3.7                               Grandfathered Severance Benefits. 
Notwithstanding anything in this Plan to the contrary, in the event that a
Covered Executive would have received higher severance benefits under Section 3
of this Plan or any other severance benefit plan sponsored by Cigna based on his
or her role under Cigna’s career architecture in effect as of the earlier of
(i) the date of a Change of Control or (ii) December 31, 2018, he or she shall
be entitled to receive the higher severance benefits subject to the terms and
conditions pursuant to which such higher severance benefits were made available.

 

ARTICLE 4

Miscellaneous

 

4.1                               Amendment; Termination.  This Plan may be
amended, modified or terminated by the Board or Committee, in the sole and
absolute discretion of either, at any time, prior to 6 months before a Change of
Control.  For the period beginning 6 months before and ending two years
following a Change of Control, no amendment, modification or termination that
would adversely affect a Covered Executive in any manner may be made without the
express written consent of that Covered Executive.

 

4.2                               Compliance with Code Section 409A.  It is
intended that the Plan comply with the requirements of Code Section 409A, and
the Plan shall be so administered and interpreted.  The Board or Committee may
make any changes required to conform the Plan with applicable Code provisions
and regulations relating to deferral of compensation under Code Section 409A.

 

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

 

4.4                               Claims Procedure.

 

(a)                                 Filing a Claim for Benefits.  This paragraph
4.4(a) shall apply to any claim for a benefit under the Plan.  A Separated
Participant or beneficiary or an authorized representative of a Participant or
beneficiary (“Claimant”) shall notify the Administrator or its delegate of a
claim for benefits under the Plan.  Such request may be in any form adequate to
give reasonable notice to the Administrator or its delegate and shall set forth
the basis of such claim and shall authorize the Administrator or its delegate to
conduct such examinations as may be necessary to determine the validity of the
claim and to take such steps as may be necessary to facilitate the payment of
any benefits to which the Claimant may be entitled under the Plan.  The
Administrator shall make all determinations as to the right of any individual to
a benefit under the Plan.

 

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If the Administrator requires more than 90 days to process a claim because of
special circumstances, an extension may be obtained by notifying the Claimant
within 90 days of the date the claim was submitted that a decision on the claim
will be delayed, what circumstances have caused the delay, and when a decision
can be expected.  The extension period shall not exceed an additional 90 days; 
provided, however, that in the event the Claimant fails to submit information
necessary to decide a claim, such period shall be tolled from the date on which
the extension notice is sent to the Claimant until the date on which the
Claimant responds to the request for additional information.

 

(b)                                 Denial of Claim.  If the Administrator
denies in whole or in part any claim for benefits under the Plan by any
Claimant, the Administrator shall, within a reasonable period, furnish the
Claimant with written or electronic notice of the denial.  The notice of the
denial shall set forth, in a manner calculated to be understood by the Claimant:

 

(1)         The specific reason or reasons for the denial;

 

(2)         Specific reference to the pertinent Plan provisions on which the
denial is based;

 

(3)         A description of any additional material or information necessary
for the Claimant to perfect the claim and an explanation of why such material or
information is necessary; and

 

(4)         A description of the Plan’s review procedures and the time limits
applicable to such procedures, including a statement of the Claimant’s right to
bring a civil action under Section 502(a) of the Employee Retirement Income
Security Act of 1974, as amended (ERISA), following an adverse benefit
determination on review.

 

(c)                                  Appeals Procedure.  This paragraph
4.4(c) shall apply to all appeals of denied claims under the Plan.  A Claimant
may request a review of a denied claim.  Such request shall be made in writing
and shall be presented to the Administrator not more than 60 days after receipt
by the Claimant of written or electronic notice of the denial of the claim.  The
Claimant shall be provided, upon request and free of charge, reasonable access
to, and copies of, all documents, records, and other information relevant to the
Claimant’s claim for benefits.  The Claimant shall also have the opportunity to
submit comments, documents, records, and other information relating to the claim
for benefits, and the Administrator shall take into account all such information
submitted without regard to whether such information was submitted or considered
in the initial benefit determination. The Administrator shall make its decision
on review not later than 60 days after receipt of the Claimant’s request for
review, unless special circumstances require an extension of time, in which case
a decision shall be rendered as soon as possible, but not later than 120 days
after receipt of the request for review;  provided, however, in the event the
Claimant fails to submit information necessary to make a benefit determination
on review, such period shall be tolled from the date on which the extension
notice is sent to the Claimant until the date on which the Claimant responds to
the request for additional information.  The decision on review shall be written
or electronic and, in the case of an adverse determination, shall include
specific reasons for the decision, in a manner calculated to be understood by
the Claimant, and specific references to the pertinent Plan provisions on

 

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which the decision is based.  The decision on review shall also include (i) a
statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records, or other
information relevant to the Claimant’s claim for benefits; and (ii) a statement
describing any voluntary appeal procedures offered by the Plan, and a statement
of the Claimant’s right to bring an action under ERISA Section 502(a).

 

(d)                                 The Plan’s claims procedure shall be
administered in accordance with the applicable regulations of the U.S.
Department of Labor.  For purposes of this Section 4.4, the Administrator shall
be an individual or group of individuals appointed by the senior human resources
officer of Cigna Corporation.  The Administrator shall have the authority to
make rules and regulations for the Plan, interpret its terms and resolve appeals
and disputes.  The Administrator has the sole discretion to determine whether
any Separated Participant is eligible for benefits and the amount of any such
benefits, as well as to interpret any Plan provisions, including ambiguous and
disputed terms.  The Administrator’s determinations and interpretations,
including determinations of fact, shall be final and binding on all parties.

 

(e)                                  A Claimant shall have no right to bring any
action in any court regarding a claim for benefits under the Plan prior to the
Claimant’s filing a claim for benefits and exhausting the Claimant’s rights to
review under this Section 4.4 in accordance with the time frames set forth
herein.

 

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

 

4.6                               Effective Date.  This Plan shall be effective
October 23, 2018.

 

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