Document:

Unassociated Document

    

      Exhibit 10.2

      DEFERRED
COMPENSATION PLAN OF 2005

      FOR
DIRECTORS OF CIGNA CORPORATION

      (Effective
January 1, 2005)

      

      Due to
requirements imposed by Internal Revenue Code Section 409A, CIGNA is freezing
the Deferred Compensation Plan for Directors of CIGNA Corporation (Amended and
Restated as of January 1, 1997) as of December 31, 2004 and adopting this new
plan – the Deferred Compensation Plan of 2005 for Directors of CIGNA
Corporation, effective as of January 1, 2005.  The frozen Deferred
Compensation Plan for Directors will continue to apply to amounts that were
deferred on or before December 31, 2004 and earnings thereon.  This
new plan will apply to amounts that are deferred after December 31, 2004 and
earnings thereon.

      

      ARTICLE I. DEFINITIONS

      

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

      

      1.1           "Administrator" shall
mean the person, or committee, appointed by the Chief Executive Officer of CIGNA
Corporation, and charged with responsibility for administration of the
Plan.

      

      1.2           "Affiliate" shall have
the meaning set forth in Rule 12b-2 promulgated under the Exchange
Act.

      

      1.3           "Annual Credit
Amount" shall mean an amount set from time to time by resolution of the
Board of Directors.

      

      1.4           "Beneficial Owner" and
"Beneficially
Owned" shall have the meaning set forth in Rule 13d-3 promulgated under
the Exchange Act.

      

      1.5           "Board of Directors"
or "Board"
shall mean the Board of Directors of CIGNA Corporation.

      

      1.6           "Change of Control"
shall mean any of these events:

      

      (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:

      

      (1)  A merger or
consolidation immediately following which the individuals who constituted the
Board of Directors 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

      

      (2)  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,

       

      
        
          
          

        

        
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      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;
or,

      

      (c)  A change occurs in the
composition of the Board of Directors at any time during any consecutive
24-month period such that the Continuity Directors cease for any reason to
constitute a majority of the Board of Directors.  For purposes of the
preceding sentence "Continuity Directors" shall mean those members of the Board
of Directors 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 of Directors (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 of Directors 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.

      

      1.7           "CIGNA Common Stock"
or "Common
Stock" or "Stock" shall mean the
common stock of CIGNA Corporation, par value of $0.25 per share.

      

      1.8           "Code" shall mean the
Internal Revenue Code of 1986, as amended.

      

      1.9           "Committee" shall mean
the Corporate Governance Committee of the Board of Directors of CIGNA
Corporation, or the successor to such committee.

      

      1.10          "Deferral Election"
shall mean the form described in Section 2.3 by which a Participant specifies
amounts and items of compensation to be deferred into the Participant’s Deferred
Compensation Account.

      

      1.11          "Deferred Compensation
Account" shall mean the separate account established under the Plan for
each Participant, as described in Section 3.1.

      

      1.12          "Effective Date" shall
mean January 1, 2005, the effective date of the Plan.

      

      1.13          "Exchange Act" shall
mean the Securities Exchange Act of 1934, as amended.

      

      
        
          
          

        

        
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      1.14          "Participant" shall
mean each individual who as a non-employee director of CIGNA Corporation
participates in the Plan in accordance with the terms and conditions of the
Plan.

      

      1.15          "Payment Election"
shall mean the form described in Section 4.2 by which a Participant specifies
the method of payment of compensation deferred under the Plan.

      

      1.16          "Person" shall have
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.

      

      1.17           "Plan" shall mean the
Deferred Compensation Plan of 2005 for Directors of CIGNA Corporation, as it may
be amended or restated from time to time by the Board of Directors.

      

      1.18           "Restricted Deferred
Compensation Account" shall mean the separate account established under
the Plan for a Participant pursuant to Section 5.1.

      

      1.19           "Separation from
Service" shall mean a Participant’s separation from service, within the
meaning of Treasury Regulation Section 1.409A-1(h).  Generally, a
Participant shall have a Separation from Service when that Participant ceases to
serve as a member of the Board or to otherwise provide services to CIGNA
Corporation or its affiliates. 

      

      1.20           "Valuation Date" shall
mean the last day of each month.

      

      

      ARTICLE II. PARTICIPATION

      

      2.1           Eligibility to Participate
in the Plan.

      

      The individuals who are eligible to
participate in the Plan are those persons who serve as non-employee directors of
CIGNA Corporation.

      

      2.2           Participation in the
Plan.

      

      An eligible director becomes a
Participant by making a Deferral Election described in Section 2.3.

      

      2.3           Deferral
Election.

      

      (a)  A Deferral Election
specifies the amounts and items of compensation a Participant elects to defer
under the Plan for a particular calendar year.  The Administrator
shall determine which items or categories of compensation may be deferred under
the Plan.  The Deferral Election must be timely (as described in
Section 2.3(b)) and in a form permitted or required by the
Administrator.  The 

       

      
        
          
          

        

        
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      Administrator
may permit or require electronic forms.  The Administrator shall
determine whether a Deferral Election form is sufficiently complete and timely
and may reject any form that is incomplete and/or untimely.

      

      (b)  To be timely, a Deferral
Election must be received by the Administrator no later than:

      

      (1)  December 31 of the year
before the year in which the Participant performs services in exchange for the
compensation to be deferred; or

      

      (2)  For a newly-elected
director, the day before the date upon which active service as a director of
CIGNA Corporation begins.

      

      However,
the Administrator may establish different deadlines to the extent permitted by
Code Section 409A and the regulations thereunder.

      

      (c)  A Participant who makes
a Deferral Election must also make a Payment Election (described in Section 4.3)
applicable to such Deferral Election.  The Payment Election must be
received by the Administrator by the applicable Deferral Election deadline
stated in Section 2.3(b).  The Administrator shall determine when a
Deferral Election and Payment Election become irrevocable, but in no event shall
a Deferral Election or a Payment Election become irrevocable later than the
applicable deadline set forth in Section 2.3(b).

      

      (d)  The Administrator may
require Participants to make a new Deferral Election for each new calendar
year.

      

      (e)  Deferral Elections under
this Plan shall apply only to compensation payable on or after January 1, 2005
and only to the extent such compensation is:

      

      (1)  For services performed
by the Participant for CIGNA Corporation on or after January 1, 2005;
or

      

      (2)  For services for which
a Deferral Election may otherwise be made under transition rules promulgated
pursuant to Code Section 409A.

      

      2.4           Cancellation of Deferral
Elections.

      

      The Administrator may cancel the
Deferral Election of a Participant who incurs a disability.  Any
cancellation under this Section 2.4 must occur by the later of the end of the
calendar year in which the Participant incurs the disability or the 15th day of
the third month after the date the Participant incurs the
disability.  For purposes of this Section 2.4, “disability” shall have
the meaning set forth in Treasury Regulation Section
1.409A-3(j)(4)(xii).

      

      ARTICLE
III.  COMPENSATION
DEFERRED

      

      3.1           Deferred Compensation
Account.

      

      A Deferred Compensation Account shall
be established for each director when the director becomes 

       

      
        
          
          

        

        
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      a
Participant.  Unless the Administrator establishes rules and
procedures that provide otherwise, compensation deferred under the Plan (other
than compensation deferred under Article V) shall be credited to the Deferred
Compensation Account as of the date such compensation would have otherwise been
paid to the Participant.  Hypothetical income on deferred compensation
shall be credited to the Deferred Compensation Account as provided in Section
3.3, below.

      

      3.2           Balance of Deferred
Compensation Account.

      

      The balance of each Participant's
Deferred Compensation Account shall include compensation deferred under this
Plan, plus amounts credited to the Participant's Deferred Compensation Account
pursuant to Section 5.3, plus income, hypothetical dividends and gains credited
with respect to hypothetical investments.  Losses from hypothetical
investments shall reduce the Participant's Deferred Compensation Account
balance.  The balance of each Participant's Deferred Compensation
Account shall be determined as of each Valuation Date.

      

      3.3           Hypothetical
Investment.

      

      (a)  Compensation deferred
under the Plan which would have been paid in cash shall be assumed to be
invested, without charge, in one or more hypothetical investment vehicles as are
specified from time to time by the Committee.  With respect to such
hypothetical investment:

      

      (1)  Cash compensation
deferred shall be deemed to earn income under the hypothetical investment
vehicle.  The Administrator shall credit such income to the
Participant's Deferred Compensation Account, pursuant to Section 3.4
below.

      

      (2)  The Committee, in its
sole discretion, may provide Plan Participants with options for one or more
additional hypothetical investment vehicles for investment of cash compensation
deferred under the Plan, with respect to which:

      

      (A)  a Participant may
modify an election of hypothetical investment and may make any transfers between
and among hypothetical investments, through a written request to the
Administrator; provided that;

      

      (B)  only one such
modification or transfer shall be allowed during any calendar
quarter;

      

      (C)  any such modification
or transfer shall be effective in the second calendar month following receipt of
the request by the Administrator; and

      

      (D)  such modifications and
transfers will be in accordance with rules and procedures adopted by the
Administrator.

      

      (b)  Compensation deferred
under the Plan into the Participant's Deferred Compensation Account as an
alternative to receipt of Common Stock, or credited to the Participant's
Restricted Deferred Compensation Account pursuant to Sections 5.1 or 5.2 of the
Plan, shall be deemed to be invested, hypothetically and without charge, in
whole shares of hypothetical Common Stock.  Shares of hypothetical
Common Stock shall be subject to adjustment in order to reflect Common Stock
dividends, splits, and 

       

      
        
          
          

        

        
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      reclassification.
Except in the event of a Change of Control, amounts in the Participant's
Deferred Compensation Account and Restricted Deferred Compensation Account
deemed invested in hypothetical Common Stock must remain so invested, and no
other investment vehicle available hereunder may be substituted therefor until
the January following the Participant's Separation from Service. Thereafter,
intra-Plan transfers may be made only in accordance with Section 3.3(a) above;
provided that all such intra-Plan transfers occurring within six months after
the Participant's Separation from Service shall be subject to approval by the
Administrator to ensure compliance with Section 16 of the Exchange
Act.

      

      (c)  Amounts equal to cash
dividends which would have been paid on shares of Common Stock shall be deemed
paid on whole shares of hypothetical Common Stock in the Participant's Deferred
Compensation Account and Restricted Deferred Compensation
Account.  Such amounts shall be credited to the Participant's Deferred
Compensation Account and shall be hypothetically invested in accordance with
Section 3.3(a) unless the Participant elects to have such amounts invested in
one or more of the other hypothetical investment vehicles specified from time to
time by the Committee.

      

      (d)  In the event of a Change
of Control, the Committee shall provide Participants with the option for
investment in at least one hypothetical investment vehicle, the annual income
earned on which must be not less than 50 basis points over the Ten-Year Constant
Treasury Maturity Yield as reported by the Federal Reserve Board, based upon the
November averages for the preceding year.

      

      3.4           Time of Hypothetical
Investment.

      

      Hypothetical investment results on a
Participant’s Deferred Compensation Account shall be credited in accordance with
rules and procedures adopted by the Administrator.

      

      3.5           Statement of
Account.

      

      The Administrator shall provide each
Participant a statement of the Participant’s Deferred Compensation Account at
least annually.

      

      

      ARTICLE
IV.  PAYMENT OF DEFERRED
COMPENSATION

      

      4.1           Payment of Deferred
Compensation.

      

      (a)  The Administrator shall
pay amounts from the Participant's Deferred Compensation Account, according to
the Participant's applicable Payment Election or under other applicable
provisions of this Article IV.

      

      (b)  Compensation deferred
into the Deferred Compensation Account and earnings thereon shall be paid to the
Participant in cash pursuant to Section 4.1(a).

      

      4.2           Payment Methods and
Timing.

      

      (a)           (1)  Subject
to the conditions in Section 4.2(b) through (e), the Administrator shall have
the authority to determine the payment methods and timing permitted under the
Plan; any such payment methods and timing shall comply with the requirements of
Code Section 409A.

      

      
        
          
          

        

        
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      (2)  Payment events under
the Plan may include a Participant’s Separation from Service, a Participant’s
Unforeseeable Emergency (as described in Section 4.4), the Participant’s death
(as described in Section 4.5), or other payment events specified by the
Administrator, to the extent permitted by Code Section 409A.  A
payment upon a Participant’s Unforeseeable Emergency or death shall supersede
any elected Separation from Service payment for the amount distributed by reason
of Unforeseeable Emergency or death.

      

      (3)  Payment methods under
the Plan may include lump sum and periodic payments.

      

      (b)  If a method of payment
provides for periodic payments, the payments shall be made annually each
January, over the elected period not to exceed 15 (fifteen)
years.  The balance of a Participant’s Deferred Compensation Account
and Restricted Deferred Compensation Account shall be paid, in all events, no
later than January 31st of the
fifteenth calendar year after the Participant’s Separation from
Service.

      

      (c)  If payments are to
commence after Separation from Service, payment shall be made (or begin) in
January of the year following the year of the Participant’s Separation from
Service.

      

      (d)  If there is not in
effect as of Participant's Separation from Service a valid Payment Election for
an amount, that amount shall be paid in a single lump sum in January of the year
following the year of the Participant’s Separation from Service.

      

      (e)  Notwithstanding anything
to the contrary in this Section 4.2, if, as of the date of a Participant’s
Separation from Service, the Participant is a specified employee, within the
meaning of Treasury Regulation Section 1.409A-1(i), payment shall be made (or
begin) on the later of the January of the year following the year of the
Participant’s Separation from Service or the seventh month after the month of
the Participant’s Separation from Service date.

      

      4.3           Payment
Election.

      

      (a)  Subject to Section 4.2,
a Payment Election must specify the payment method that shall apply to
Participant’s deferred compensation and the time of payment or the time payments
are to begin.

      

      (b)  A Payment Election must
be in a form permitted or required by the Administrator.  The
Administrator may permit or require electronic forms.  The
Administrator shall determine whether a Payment Election form is sufficiently
complete and timely and may reject any form that is incomplete and/or
untimely.

      

      4.4           Unforeseeable Emergency
Payment.

      

      (a)  Notwithstanding any
other provision of the Plan, if the Committee, after consideration of a
Participant's application, determines that the Participant has an unforeseeable
emergency, as defined under Treasury Regulation Section 1.409A-3(i)(3), beyond the Participant's
control, and of such a substantial nature that immediate payment of compensation
deferred under the Plan is warranted, the 

       

      
        
          
          

        

        
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      Committee
in its sole and absolute discretion may direct that all or a portion of the
balance of the Participant's Deferred Compensation Account be paid to the
Participant in cash.  The amount of any such distribution shall be
limited to the amount deemed necessary by the Committee to satisfy the emergency
need.  The payment shall be made in a single lump sum within 90 days
following the Committee’s approval of the Participant’s application for an
unforeseeable emergency payment.

      

      (b)  The Administrator shall
cancel the Deferral Election of a Participant who receives a payment for an
unforeseeable emergency, as defined under Treasury Regulation Section
1.409A-3(i)(3), under this Plan or a predecessor to this Plan.  The
cancellation shall be effective as of the date of the unforeseeable emergency
payment.  To resume deferrals of compensation under this Plan, the
Participant must execute a new Deferral Election in accordance with the
requirements of Section 2.3.

      

      4.5           Payments of a Deceased
Participant's Account

      

      (a) If a Participant dies before the
Administrator has paid the Participant’s entire Deferred Compensation Account
and Restricted Deferred Compensation Account, the Administrator shall pay the
remaining Deferred Compensation Account balance and Restricted Deferred
Compensation Account balance in a single lump sum payment to the person(s) or
trust(s) designated in writing by the Participant as the Participant’s
beneficiary(ies) under the Plan.  The Administrator is authorized to
establish rules and procedures for designations of beneficiaries and shall have
the sole discretion to make determinations regarding the existence and identity
of beneficiaries and the validity of beneficiary designations.

      

      (b) Notwithstanding Section 4.5(a), the
Administrator shall pay the Deferred Compensation Account balance and Restricted
Deferred Compensation Account balance in a single lump sum payment to the
Participant's estate if:

      

      (1) The Participant dies without
having a valid beneficiary designation in effect;

      

      (2) The Participant's designated
beneficiary has predeceased the Participant; or

      

      (3) The Participant's designated
beneficiary cannot be found after what the Administrator determines, in the
Administrator’s sole discretion, has been a reasonably diligent
search.

      

      (c) The Administrator shall make any
payments described in Section 4.5(a) and (b) during the 90 day period
immediately following the date of the Participant’s death.

      

      

      ARTICLE V. Restricted Deferred
Compensation Accounts

      

      5.1           Establishment of Restricted
Deferred Compensation Accounts

      

      (a) A Restricted Deferred Compensation
Account was established for each person serving as a director of CIGNA
Corporation on December 31, 1996 except directors who (1) if they had retired on
or before December 31, 1996, would have satisfied the eligibility requirements
("Eligibility Requirements") under Section 1 of the Retirement and Consulting
Plan for Directors of CIGNA Corporation (the "Retirement Plan") and (2) did not
waive their rights under the Retirement Plan on or before December 31,
1996.  As of January 1, 1997, the present value of the accrued
benefits under the Retirement Plan of each 

       

      
        
          
          

        

        
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      Participant
for whom a Restricted Deferred Compensation Account had been established was
credited to that Participant's Restricted Deferred Compensation
Account.  The credited amounts are deemed to be invested and remain
invested thereafter, hypothetically and without charge, in whole shares of
hypothetical Common Stock.  The number of whole hypothetical Common
Shares credited to the Restricted Deferred Compensation Accounts was determined
by using the average closing price for CIGNA Common Stock as reported on the
Composite tape (or successor means of publishing stock prices) for the ten (10)
business days prior to January 1, 1997.

      

      (b) A Restricted Deferred Compensation
Account was established for each person first elected to the Board of Directors
of CIGNA Corporation after December 31, 1996 and before April 28,
2005.

      

      5.2           Annual Credit
Amount

      

      Beginning in 1997 and in each year
thereafter through 2005, on the last business day of the month during which
CIGNA’s Corporation's Annual Meeting of Shareholders is held, the Annual Credit
Amount will be credited to the Restricted Deferred Compensation Account of each
Participant who is then a director of CIGNA Corporation for whom such an account
has been established pursuant to Section 5.1.  That amount shall be
assumed to be invested and remain invested thereafter, hypothetically and
without charge, in whole shares of hypothetical Common Stock.  The
number of whole shares shall be determined by dividing the Annual Credit Amount
by the average closing price for CIGNA Common Stock (as reported on the
Composite tape or successor means of publishing stock prices) for the last ten
(10) business days of the month during which CIGNA Corporation's Annual Meeting
of Shareholders is held.

      

      This Plan shall only apply to the
Annual Credit Amount credited to Restricted Deferred Compensation Accounts in
2005.

      

      5.3           Dividends and
Adjustments

      

      Hypothetical dividends on hypothetical
shares described in Section 5.2 shall be credited to the Participant's Deferred
Compensation Account and be invested and adjusted as provided in Section
3.3(c).

      

      5.4           Time of
Payment

      

      Payments of the balance in the
Restricted Deferred Compensation Account shall:  be made in cash; be
made (or begin) in the January of the year following the year in which the
Participant's Separation from Service occurs; and be made in accordance with the
Participant's applicable Payment Election or, if applicable, Section 4.2(d) of
this Plan. Notwithstanding the foregoing, if, as of the date of a Participant’s
Separation from Service, the Participant is a specified employee, within the
meaning of Treasury Regulation Section 1.409A-1(i), payment shall be made (or
begin) on the later of the January of the year following the year of the
Participant’s Separation from Service or the seventh month after the month of
the Participant’s Separation from Service date. If a Participant dies before the
entire balance in the Participant’s Restricted Deferred Compensation Account has
been paid to the Participant, the Administrator shall pay such balance pursuant
to Section 4.5 of this Plan.

      

      5.5           Statement of Restricted
Deferred Compensation Account

      

      
        
          
          

        

        
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      The Administrator shall provide each
Participant a statement of the Participant’s Restricted Deferred Compensation
Account at least annually.  The balance in the Participant's
Restricted Deferred Compensation Account shall be calculated in accordance with
Section 3.2 of the Plan.

      

      

      ARTICLE
VI.  GENERAL
PROVISIONS

      

      6.1           Committee
Membership.

      

      A Participant who is also a member of
the Committee shall take no part in any decision pertaining to any action under
the plan related to such Participant.

      

      6.2           Participant's Rights
Unsecured.

      

      The right of any Participant (or
beneficiary) to receive payments under the provisions of the Plan represents an
unsecured claim against the general assets of CIGNA Corporation, or against the
general assets of any successor company which assumes the liabilities of CIGNA
Corporation.

      

      6.3           Assignability.

      

      Except as otherwise permitted by
applicable law, no right to receive payments hereunder shall be transferable or
assignable by a Participant.  Any attempted assignment or alienation
of payments hereunder shall be void and of no force or effect.

      

      6.4           Administration.

      

      Except as otherwise provided herein,
the Plan shall be administered by the Administrator who shall have the authority
to adopt rules and regulations for carrying out the Plan, and who shall
interpret, construe and implement the provisions of the Plan. The Administrator may, by
contract, designation or other arrangement, provide for others to perform
ministerial duties and record keeping.

      

      6.5           Amendment.

      

      The Plan may be amended, restated,
modified, or terminated by the Board of Directors.  No amendment,
restatement, modification, or termination shall reduce, impair or adversely
affect the dollar value of a Participant's Deferred Compensation Account balance
or Restricted Deferred Compensation Account balance as of the Valuation Date
immediately preceding such action.

      

      6.6           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.  Notwithstanding anything in this Plan
to the contrary, the 409A transition relief opportunities adopted by Board
Resolution dated December 8, 2005 are incorporated by reference into this
Plan.

      

      6.7           Section 16
Compliance.

      

      
        
          
          

        

        
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      If the Administrator determines that,
in order to comply with Section 16 of the Exchange Act, it is necessary for the
Board rather than the Committee to take any action which the Plan authorizes the
Committee to take, the Administrator shall request the Board to do
so.

      

      6.8           Construction.

      

      The masculine gender where appearing in
the Plan shall be deemed to include the feminine gender.  The singular
shall be deemed to include the plural; and the plural the singular.

      

      6.9           Interpretation.

      

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

      

      6.10         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.

       

      
 

      

-11-ex10-3.htm

                                                                                                               Exhibit
10.3

    

    

    CIGNA
RESTRICTED SHARE EQUIVALENT

    PLAN
FOR NON-EMPLOYEE DIRECTORS

    (Amended
and Restated Effective January 1, 2008)

    

    ARTICLE
1

    Statement
of Purpose; Effect on Prior Plans

    

    The CIGNA
Restricted Share Equivalent Plan for Non-Employee Directors (Amended and
Restated Effective January 1, 2008) (“Plan”) is an amendment and restatement of
the Restricted Stock/Stock Equivalent Plan for
Non-Employee Directors of CIGNA Corporation (“Former Plan”).

    

    The
Company granted restricted shares of Company Common Stock under the Former Plan
from September 30, 1989 to September 30, 2004, and Restricted Share Equivalents
(described in Article 3) from October 1, 2004 to January 1, 2006.  No
grants of any kind were made under the Former Plan after January 1, 2006. The
Former Plan was closed to new participants effective January 17,
2006.

    

    This Plan
applies only to Restricted Share Equivalents granted under the Former Plan
between October 1, 2004 and January 1, 2006.  No grants will be made
under this Plan.  The purpose of this amendment and restatement is to
comply with Section 409A of the Internal Revenue Code and to delete now-obsolete
Plan provisions.

    

    

    ARTICLE
2

    Definitions

    

    Except as
otherwise provided in the Plan or unless the context otherwise requires, the
terms defined below shall have the following meanings under the
Plan:

    

    
      	
              2.01

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

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

    

     

    
      	
              2.03

            	
              “Board” -- the Company’s
      Board of Directors.

            

    

    

    
      	
              2.04

            	
              “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 the Company having 25% or more of the
      combined voting power of the Company’s then outstanding securities;
      or

            

    

    

    
      	
              (b)

            	
              There
      is consummated a merger or consolidation of the Company or any direct or
      indirect subsidiary of the Company 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 

            

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
      	 	 	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 the
      Company (or similar transaction) in which no Person is or becomes the
      Beneficial Owner, directly or indirectly, of securities of the Company
      (not including in the securities Beneficially Owned by such Person any
      securities acquired directly from the Company or its Affiliates)
      representing 25% or more of the combined voting power of the Company's
      then outstanding securities;

            

    

    

    
      	
              (c)

            	
              A
      change occurs in the composition of the Board at any time during any
      consecutive 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 the Company);
      or

            

    

    

    
      	
              (d)

            	
              The
      shareholders of the Company approve a plan of complete liquidation or
      dissolution of the Company or there is consummated an agreement for the
      sale or disposition by the Company of all or substantially all of the
      Company’s assets, other than a sale or disposition by the Company of all
      or substantially all of the Company’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 the Company 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 the Company immediately following such transaction or series of
transactions.

         

    
      	2.05	“Committee” -- the
      Corporate Governance Committee of the Board or any successor committee
      with responsibility for compensation of directors.
	 	 
	
              2.06           

            	“Common Stock” -- the
      common stock, par value $0.25 per share, of CIGNA
Corporation.
	 	 
	
              2.07

            	
              “Company” -- CIGNA
      Corporation.

            
	 	 
	2.08 	“Disability” -- a
      permanent and total disability as defined in Section 22(e)(3) of the
      Internal Revenue Code.

    

          

    2.09           “Eligible Director” -- a
person who (a) was elected to the Board after September 30, 1989 and before
January 1, 2006; (b) served as a director for at least six months; and (c) for
the ten-year period ending on the date such service began, was not an officer or
employee of the Company or any of its Subsidiaries.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      2.10           “Exchange Act” -- the
Securities Exchange Act of 1934, as amended.

    

    

    2.11           “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) the Company or
any of its Subsidiaries, (b) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company 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 the Company in substantially the same proportions as their
ownership of stock of the Company.

    

    2.12           “Plan” -- the CIGNA Restricted
Share Equivalent Plan for Non-Employee Directors (Amended and Restated Effective
January 1, 2008).

    

    2.13           “Restricted Share Equivalent”
-- a unit that represents a right to a cash payment equal to the value of one
share of the Company’s Common Stock and a right to payment of hypothetical
dividends, as described in Article 3.

    

    2.14           “Separation from Service” -- an
Eligible Director’s separation from service, within the meaning of Treasury
Regulation Section 1.409A-1(h).  Generally, a Separation from Service
occurs when a Director ceases to serve as a member of the Board or otherwise
provide services to the Company or its affiliates.

    

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

    

    

    ARTICLE
3

    Restricted
Share Equivalents

    

    3.01           Eligibility and
Grant.   Each director who became an Eligible Director
after October 1, 2004 but before January 17, 2006 received a grant of 4,500
Restricted Share Equivalents, effective as of the date the director became an
Eligible Director.  All outstanding Restricted Share Equivalents were
adjusted to reflect a three-for-one stock split on June 4, 2007, so that
Eligible Directors with outstanding grants had 13,500 Restricted Share
Equivalents as of the split effective date.

    

    3.02           General.  The
Company maintains an account on its books and records to record the number of
Restricted Share Equivalents granted by the Company to Eligible
Directors.  Subject to the provisions of Section 3.04 below, the
restrictions set forth in Section 3.03 shall apply to each grant of Restricted
Share Equivalents.  An Eligible Director’s right to receive plan
payments represents an unsecured claim against CIGNA Corporation’s general
assets.

    

    3.03           Restrictions on Restricted Share
Equivalents.  The following restrictions apply to Restricted
Share Equivalents:

     

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
 

    
      	
              (a)

            	
              Except
      as otherwise provided in Section 3.06, the Eligible Director shall not be
      entitled to the payment of the Restricted Share Equivalents until the date
      provided in Section 3.05;

            

    

    

    
      	
              (b)

            	
              None
      of the Restricted Share Equivalents may be sold, transferred, assigned,
      pledged, or otherwise encumbered or disposed of;
  and

            

    

    

    
      	
              (c)

            	
              All
      of the Restricted Share Equivalents shall be forfeited, and all rights of
      the Eligible Director to such Restricted Share Equivalents shall terminate
      without further obligation on the part of the Company, upon the Eligible
      Director’s ceasing to be a director of the Company before the date the
      Restricted Share Equivalents vest.

            

    

    

    3.04  Vesting of Restricted Share
Equivalents.

    

    
      	
              (a)

            	
              The
      Restricted Share Equivalents granted to an Eligible Director shall vest on
      the later of:

            

    

    

    
      	
               
      

            	
              (1)

            	
              Six
      months after the date of grant; or

            

    

    
      	
               
      

            	
              (2)

            	
              The
      earliest of:

            

    

    

    
      	
               
      

            	
              (A)

            	
              The
      Eligible Director's ninth anniversary of continuous service as a director
      of the Company;

            

    

    
      	
               
      

            	
              (B)

            	
              The
      Eligible Director's attainment of age
65;

            

    

    
      	
               
      

            	
              (C)

            	
              The
      Eligible Director's Disability;

            

    

    
      	
               
      

            	
              (D)

            	
              The
      Eligible Director's death; or

            

    

    
      	
               
      

            	
              (E)

            	
              The
      occurrence of a Change of Control.

            

    

    

    
      	
              (b)

            	
              If
      an Eligible Director’s resignation is accepted because he or she failed to
      receive the required majority vote for reelection and his or her
      Restricted Share Equivalents have not yet vested pursuant to Section
      3.04(a), then a pro-rated portion of the Eligible Director’s Restricted
      Share Equivalents shall automatically vest effective as of the date of
      such resignation, with the portion to vest determined by multiplying
      13,500 (adjusted as needed after June 4, 2007 in accordance with Section
      4.01) by the following fraction: the number of complete months the
      Eligible Director performed continuous service as a director of the
      Company divided by 108.  Any resulting fractional Restricted
      Share Equivalent shall be
eliminated.

            

    

    

    
      	
              (c)

            	
              If
      an Eligible Director ceases to be a director of the Company before the
      vesting of Restricted Share Equivalents pursuant to Section 3.04(a) or
      (b), the Eligible Director shall immediately forfeit all unvested
      Restricted Share Equivalents, except to the extent a majority of the other
      members of the Board approves their
vesting.

            

    

    

    3.05           Payment of Vested Restricted Share
Equivalents. The cash value of the vested Restricted Share Equivalents
shall be determined as of the date of an Eligible Director’s Separation from
Service by using the closing price on that date as reported on the Composite
tape or successor means of publishing stock prices (or, if the Composite tape or
successor publication is not published on the date of Separation from Service,
the closing price for the next preceding date of publication).  The
Company shall pay the resulting cash value in a lump sum to the Eligible
Director (or the Eligible Director's beneficiary or estate,
as the case may be) within 45 days of the Eligible Director's Separation from
Service.  

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
 

    Notwithstanding the
foregoing, if an Eligible Director is a specified employee within the meaning of
Treas. Reg. sec. 1.409A-1(i) as of the date of Separation from Service, payment
shall be made in a lump sum in the seventh month following Separation from
Service. Restricted Share Equivalents will cease to be outstanding and an
Eligible Director will cease to have any rights under them as of the date they
are paid or forfeited.

     

    3.06           Hypothetical
Dividends.  Each year that a Restricted Share Equivalent is
outstanding, a lump sum payment shall be made to the Eligible Director in an
amount equal to any dividends declared and paid on one share of Company Common
Stock in that year (to the extent the record date for any such actual dividend
occurs while the Restricted Share Equivalent is outstanding).

    

    Article
4

    Miscellaneous

    

    4.01           Adjustment in Event of Changes in
Capitalization.  In the event of a combination or exchange of
shares, merger, consolidation, rights offering, separation, reorganization or
liquidation, or any other change in the corporate structure of the Company, the
Board may make such equitable adjustments, to prevent dilution or enlargement of
rights, as it may deem appropriate in the number of Restricted Share
Equivalents.  Outstanding Restricted Share Equivalents shall be
adjusted proportionally to reflect any recapitalization, stock split or stock
dividend.  Any additional Restricted Share Equivalents issued as
a consequence of any such changes in the corporate structure or shares of the
Company shall be subject to the same restrictions and provisions applicable to
the Restricted Share Equivalents with respect to which they are
issued.

    

    4.02           Termination or Amendment of the
Plan.  The Board may at any time terminate the Plan and may
from time to time alter or amend the Plan or any part hereof (including any
amendment deemed necessary to ensure that the Company may comply with any
regulatory requirement) without shareholder approval, unless otherwise required
by law or by the rules of the Securities and Exchange Commission or New York
Stock Exchange.  No termination or amendment of the Plan may, without
the consent of an Eligible Director, impair the rights of such director with
respect to outstanding Restricted
Share Equivalents.  

    

    4.03           Administration.  The
Plan is to be administered by the Committee.  The Committee shall have
full power and authority to adopt, amend and rescind administrative guidelines,
rules and regulations relating to this Plan, to interpret the Plan and to rule
on any questions relating to any of its provisions, terms and
conditions.

    

    4.04           No Obligation to
Nominate.  Nothing in the Plan shall be deemed to create any
obligation on the part of the Board to nominate any director for reelection by
the Company's shareholders.

    

    4.05           Taxes and
Withholding.  The Company shall have the right to withhold any
taxes as required by law with respect to the cash value of the Restricted Share
Equivalents.

    

    4.06           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.

     

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
 

    4.07           Effective
Dates.  The Former Plan became effective as of September 30,
1989.  The effective date of this amended and restated Plan is January
1, 2008.

    

    4.08           References.  All
statutory and regulatory references in this Plan shall include successor
provisions.

    

    4.09           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.

    

    END OF
DOCUMENT

    

    
 

     

     

    6

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