Document:

Exhibit 10.4

 

Form of Cigna Long-Term Incentive Plan:  Restricted Stock Grant Agreement

 

Cigna Corporation (“Cigna”) has granted you the number of shares of restricted stock of Cigna set forth below in this Restricted Stock Grant Agreement (“Restricted Stock Grant” or “Grant”) under the Cigna Long-Term Incentive Plan (“Plan”).  The date of your Restricted Stock Grant (“Grant Date”) and the date on which your Grant is scheduled to vest (“Vesting Date”) are also indicated below. The award is subject to the provisions of the Plan and the Terms and Conditions below.

 

You should carefully read all the terms and conditions of this Restricted Stock Grant and be sure you understand what they say and what your responsibilities and obligations are before you click on the ACCEPT button to acknowledge and agree to this Grant.

 

If you are not willing to agree to all of the Grant terms and conditions, do not accept the Grant and do not click the ACCEPT button for the Restricted Stock Grant Acknowledgment and Agreement.  If you do not accept the Grant, you will not receive the benefits of the Grant.

 

If you do click on the ACCEPT button, you are accepting and agreeing to all of the terms and conditions of this Restricted Stock Grant.

 

Participant:

Grant Type:

Plan Name:  Cigna Long-Term Incentive Plan

 

Grant Date:

Total Granted:

Grant Price:   (USD)

 

Vesting Schedule

 

	
Shares Granted
    	
Vesting Date
    
	
 
    	
 
    

 

You should also read the Plan Document and Key Contacts and Reference Materials document (attached to the Plan) and indicate that you have done so and agree to the terms by checking the appropriate box in the online grant acceptance process.  The Key Contacts and Reference Materials document contains information on how to get important stock award information (such as the Plan Prospectus, Tax Considerations and Cigna’s Securities Transactions and Insider Trading Policy) and whom to contact if you have questions.

 

Please be aware that the Cigna Securities Transactions and Insider Trading Policy places restrictions on your transactions in Cigna securities and requires certain Cigna employees to obtain advance permission from the Corporate Secretary before executing transactions in Cigna securities.

 

If you have questions about your award, please contact Cigna Shareholder Services by email at shareholderservices@cigna.com or by phone at 215.761.3516.

 

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Important Notice:  Restricted Stock Grant Acknowledgment and Agreement

 

By clicking on the ACCEPT button, I:

1.              Acknowledge and represent to Cigna that I have:

a.              received the Restricted Stock Grant;

b.              read and understand its terms and conditions, which include, among other things, restrictive covenants such as non-competition, customer and employee non-solicitation and non-disclosure provisions and  litigation cooperation and intellectual property assignment and assistance provisions; and

c.               received answers to any questions I had about the Grant and its terms and conditions, including the restrictive covenants.

 

2.              Understand and agree that:

a.              Delaware law governs the interpretation and construction of the Grant; and

b.              any controversy or proceeding arising out of or relating to the restrictive covenants in the Grant will be brought exclusively before a federal or state court in the State of Delaware where venue is appropriate and that has subject matter jurisdiction (collectively, “Delaware Courts”).

 

3.              Consent to Delaware Courts exercising personal jurisdiction over me in any dispute about the restrictive covenants.

 

Scroll down for the TERMS AND CONDITIONS of the Restricted Stock Grant.

 

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TERMS AND CONDITIONS OF YOUR [Year]

RESTRICTED STOCK GRANT

 

These Terms and Conditions are an important part of your grant of Restricted Stock from Cigna Corporation (Cigna).  The terms of your Restricted Stock grant are in: (a) the electronic Restricted Stock Grant Agreement above, (b) these Terms and Conditions, and (c) the applicable Plan provisions.

 

Certain words in this document with first letters capitalized are defined in the Restricted Stock Grant Agreement above, these Terms and Conditions or Article 2 of the Plan.  This grant is void if you are not an employee of Cigna or a Subsidiary (a Cigna company) on the Grant Date.

 

1.                                      Restricted Stock; Restrictions

 

Shares of Restricted Stock (Shares) are regular shares of Cigna Common Stock, but they are subject to certain Restrictions.  The Restrictions are:

 

(a)                                 You cannot sell or transfer the Shares to anyone during the Restricted Period; and

 

(b)                                 Unless an exception applies, you will forfeit (lose your right to) the Shares if you have a Termination of Employment during the Restricted Period.

 

Article 7 of the Plan describes these Restrictions in more detail.  In addition, you must also comply with all the other terms and conditions of this grant, including those contained in this document.

 

2.                                      Restricted Period; Vesting

 

The Restricted Period starts on the Grant Date and ends on [    ].  The Restrictions on the Shares will end (your Shares will vest) on [    ] only if you remain continuously employed by a Cigna company from the Grant Date to [     ] and comply with all the terms and conditions of this grant, including those contained in this document.

 

Your vesting date may be earlier (see paragraph 3).

 

3.                                      Early Vesting

 

In certain situations your vesting date may be earlier than the Vesting Date described in paragraph 2:

 

(a)                                 The Shares will vest upon your Termination of Employment if it is Upon a Change of Control (of Cigna Corporation) or due to your death or Disability.

 

(b)                                 The Shares may vest upon your Termination of Employment if:

 

(1)                                 It is due to your Early Retirement or Retirement; and

 

(2)                                 The People Resources Committee or its designee (including Cigna’s senior human resources officer) approves the early vesting before your Termination of Employment.

 

If you want to be considered for early vesting when you retire, you must ask your manager or human resources representative far enough in advance of your retirement so there is time to process your request.

 

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4.                                      Voting Rights; Dividends

 

(a)                                 You have the right to vote the Shares.  If you forfeit a Share, you will also forfeit the right to vote the Share.

 

(b)                                 You have the right to receive dividends on the Shares.  Dividends paid on the Shares during the Restricted Period will be held by Cigna.  Subject to the forfeiture provisions of paragraph 4(c), your right to receive accumulated dividends on a Share will vest on the scheduled Vesting Date for the Share described in paragraph 2 (Scheduled Vesting Date).  Once a Share vests, your right to future dividends on the Share, and the method of payment, will be the same as for any other Cigna shareholder.

 

(c)                                  If you forfeit a Share, you will also forfeit the right to any accumulated and future dividends related to the Share.  Even if you do not forfeit a Share, you will forfeit the right to any accumulated dividends on the Share if:

 

(1)                                 You have a Termination of Employment before the Scheduled Vesting Date for a Share (even if the Share vests under paragraph 3);

 

(2)                                 The Scheduled Vesting Date for a Share occurs before the Share vests (because vesting is delayed); or

 

(3)                                 You are on a leave of absence when the Share vests.

 

(d)                                 Vested accumulated dividends, less applicable taxes withheld, will be paid to you in a lump sum within 70 days after the Scheduled Vesting Date.  Cigna will not pay any interest on the accumulated dividends.

 

5.                                      Taxes at Vesting

 

When the Shares vest, you must satisfy any required tax withholding obligation.  Cigna reserves the right to withhold enough newly-vested Shares to cover all or part of any applicable tax withholding.  However, if section 83(b) of the U.S. Internal Revenue Code of 1986, as amended, applies to you and you make a timely election under that provision, you must make an immediate cash payment to satisfy any required tax withholding obligation.

 

6.                                      Book-Entry Shares; Sale of Shares

 

(a)                                 Cigna (or a custodian appointed by Cigna) will hold your Shares before and after vesting in book-entry form in a Stock Account.  That is, a record of your Share ownership will be kept electronically, and you will not risk losing any Share certificates.  A certificate for vested Shares will be issued to you only if you ask for one, but not if you have engaged in a Violation (described in paragraph 7(c)).

 

(b)                                 You may generally sell or transfer vested Shares at any time, but your right to sell the Shares after they vest may be limited by Cigna.  This right is subject to the terms of Cigna’s Securities Transactions and Insider Trading Policy, and Cigna reserves the right, for any reason at any time, to suspend or delay action on any request you make to sell the Shares.

 

7.                                      Conditions of Grant

 

(a)                                 By accepting the grant, you are agreeing:

 

(1)                                 to the Inventions provision in paragraph 7(b); and

 

(2)                                 not to engage in any Violation described in paragraph 7(c).

 

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You understand and agree that your agreement to the Inventions provision and not to engage in any Violation are a material part of the inducement for Cigna’s granting you the Shares and essential pre-conditions to your eligibility to exercise any rights associated with the Shares and retain any benefit from the vesting of the Shares.

 

(b)                                 Inventions

 

(1)                                 You hereby assign and promise to assign to Cigna companies or their designee, all your right, title, and interest in and to any and all current and future Inventions.  You acknowledge that all original works of authorship which you make (whether alone or jointly with others) within the scope of your Cigna company employment and which are protectable by copyright are “works made for hire,” as defined in the United States Copyright Act.

 

(2)                                 You agree to (i) maintain and make available adequate current records, including electronic records, notes, sketches and drawings, of all Inventions you make, and (ii) disclose such Inventions in writing upon request. These records will remain the property of Cigna companies.

 

(3)                                 If in the course of your Cigna company employment, you incorporate a Prior Invention into any Cigna company work product, you grant Cigna companies a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to use the Prior Invention as part of or in connection with the work product. Within 45 days after the date of this grant, you agree to notify Cigna Shareholder Services (shareholderservices@Cigna.com) of any Prior Inventions that you are not assigning under this paragraph 7(b).

 

(4)                                 “Inventions” means any and all inventions, original works of authorship, developments, concepts, sales methods, improvements, trade secrets, or similar intellectual property, whether or not patentable or registrable under copyright or similar laws, that relate to any Cigna company’s current or proposed business, work products or research and development which you have or will solely or jointly conceive, develop, reduce to practice, or fix during your Cigna company employment.

 

(5)                                 “Prior Inventions” means all inventions, original works of authorship, developments, concepts, sales methods, improvements, trade secrets or similar intellectual property, whether or not patentable or registrable under copyright or similar laws, that relate to any Cigna company’s current or proposed business, work products or research and development which you conceived, developed, reduced to practice or fixed before your Cigna company employment and which belong to you.

 

(c)                                  Violation

 

You will engage in a “Violation” if, directly or indirectly, you engage in any misconduct described in paragraph 7(c)(1) below or you break any of the “Promises” in paragraphs 7(c)(2) through (7) below:

 

(1)                                 Misconduct:

 

(A)                               You have a Termination of Employment initiated by a Cigna company because of your misconduct, as that term is defined in Cigna’s Code of Ethics, Standards of Conduct or other employment policies.

 

(B)                               You do anything else while an employee of any Cigna company that is not discovered by the company until after your Termination of Employment

 

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and that would, if you had still been employed at the time of the discovery, be reason for your Termination of Employment for misconduct, as described above.

 

(2)                                 Promise Not To Compete against Cigna Companies:

 

(A)                               If you are in Career Band 6 or higher on your Termination of Employment date:

 

You Promise not to become employed by, work as a consultant or independent contractor for, or in any way render services or assistance to any Cigna Competitor (defined in paragraph 7(c)(2)(C) below) at any time during the period that starts on the Grant Date and ends 12 months after your Termination of Employment.

 

You acknowledge and agree that:

 

(i)                                   Cigna’s business competes on a global basis;

 

(ii)                                Cigna’s sales and marketing plans are for continued expansion throughout the United States of America and globally;

 

(iii)                             You have had access to and received Confidential Information (described in paragraph 7(c)(5)(B) below); and

 

(iv)                            The time restrictions and global nature of this non-competition restriction are reasonable and necessary to protect Cigna’s business and Confidential Information.

 

(B)                               If you are in Career Band 5 or below on your Termination of Employment date:

 

You Promise not to become employed by, work as a consultant or independent contractor for, or in any way render services or assistance to any Cigna Competitor (defined in paragraph 7(c)(2)(C) below) at any time during the period that starts on the Grant Date and ends 12 months after your Termination of Employment, if that work is similar to, and within the same geographic area as, the work you performed, or for which you had responsibility, at any Cigna company at any time during the six-month period that ends on your Termination of Employment date.

 

For example:

 

(i)                                   If you are a sales employee and your sales territory at any time during your last six months of Cigna company employment is Pennsylvania, New Jersey, and New York, this paragraph 7(c)(2)(B) would apply to you only if you work in a sales position for a Cigna Competitor and only to the extent your new sales territory is Pennsylvania, New Jersey, and/or New York;

 

(ii)                                If you are an underwriter with nationwide responsibilities at any time during your last six months of Cigna company employment, and you seek a job with a Cigna Competitor as an underwriter, the restrictions in paragraph 7(c)(2)(B) would be nationwide in scope; or

 

(iii)                             If you work in a particular division or segment of Cigna, you would not be permitted to work in a similar division or segment

 

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for a Cigna Competitor where the work you are expected to perform for the competitor is similar to the work you performed for any Cigna company.

 

You acknowledge and agree that you have had access to and received Confidential Information (described in paragraph 7(c)(5)(B) below) and the above time and geographic restrictions are reasonable and necessary to protect Cigna’s business and Confidential Information.

 

(C)                               “Cigna Competitor” means any business that competes directly or indirectly with any Cigna company’s product or service.

 

(D)                               The Promise in paragraph 7(c)(2) not to compete against Cigna companies after  Termination of Employment will not apply and Cigna will not enforce it with respect to Cigna company employment in California.

 

(3)                                 Promise Not To Solicit or Hire Cigna Company Employees:

 

(A)                               You Promise that, at any time during your Cigna company employment and the period that ends 12 months after your Termination of Employment, you will not:

 

(i)                                   Solicit any employee of any Cigna company to terminate his/her employment with, or otherwise cease his/her relationship, contractual or otherwise, with that Cigna company; or

 

(ii)                                Hire any Cigna company employee.

 

(B)                               This paragraph 7(c)(3) will not apply to applications for employment submitted voluntarily by any Cigna employee, in response to a general advertisement or otherwise, so long as neither you, nor anyone acting on your behalf or in response to information provided by you, otherwise Solicits the employees to leave Cigna.

 

(C)                               To “Solicit” means to entice, encourage, persuade, or solicit, or to attempt to entice, encourage, persuade or solicit.

 

(4)                                 Promise Not To Solicit Cigna Company Customers:

 

(A)                               You Promise that, at any time during your Cigna company employment and the period that ends 12 months after your Termination of Employment, you will not:

 

(i)                                   Solicit any Cigna company customer to end an existing relationship, contractual or otherwise, with that Cigna company;

 

(ii)                                Solicit any Cigna company customer to reduce the volume of their business dealings with Cigna; or

 

(iii)                             Solicit any potential Cigna company customer to enter into any business arrangements with you or any business which you may become employed by, or affiliated in any way with, after leaving any Cigna company, if such business arrangements would compete in any way with any business that Cigna company has conducted, or has been planning to conduct, during the 12-month period ending on the date of the Violation.

 

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 (B)                          The Promise in paragraph 7(c)(4)(A) above applies only to a customer or potential customer with whom you had any Material Contact while employed by any Cigna company.  “Material Contact” means you:

 

(i)                                   Had business dealings with the customer on behalf of any Cigna company within the three-year period ending on the date of the Solicitation;

 

(ii)                                Were responsible for supervising or coordinating the dealings between any Cigna company and the customer or potential customer anytime during the three-year period ending on the date of the Solicitation; or

 

(iii)                             Obtained, at any time, trade secrets or confidential information about a customer or potential customer with whom you had contact as a result of your employment by any Cigna company.

 

(C)                             “Solicit” is defined in paragraph 7(c)(3)(C).

 

(D)                             The Promise in paragraph 7(c)(4) not to solicit Cigna company customers after  Termination of Employment will not apply and Cigna will not enforce it with respect to Cigna company employment in California unless the activity involves the use of Confidential Information.

 

(5)                                 Promise Not To Disclose Cigna Companies’ Confidential Information:

 

(A)                               You Promise not to disclose any Confidential Information to any third-party at any time, whether during or after your employment, without the prior written consent of Cigna (except to the extent required by an order of a court having competent jurisdiction or a properly issued subpoena) unless that Confidential Information was previously disclosed publicly by Cigna or has become public knowledge (other than by your disclosure). Nothing in this Confidentiality provision prohibits you or your counsel from initiating communications directly with, or responding to any inquiry from, or providing testimony before any self-regulatory organization or any state or federal regulatory authority. In the event that you are required to disclose Confidential Information pursuant to a subpoena or other law or regulation, you shall notify Cigna promptly upon learning that you have been subpoenaed or are otherwise required or compelled to divulge Confidential Information.

 

(B)                               “Confidential Information” means any Cigna company trade secrets, confidential information, or proprietary materials, including but not limited to customer lists, financial records, marketing plans and sales plans.

 

(6)                                 Promise to Cooperate With Cigna in Investigations or Litigation:

 

(A)                               You Promise that, at any time after your Termination of Employment, you will cooperate with Cigna in (i) all investigations of any kind, (ii) helping to prepare and review documents and meeting with Cigna attorneys, and (iii) providing truthful testimony as a witness or a declarant during discovery and/or trial in connection with any present or future court, administrative, agency, or arbitration proceeding involving any Cigna company and with respect to which you have relevant information.

 

(B)                               Cigna agrees that it will reimburse you, upon production of appropriate receipts and in accordance with Cigna’s then existing Business Travel

 

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Reimbursement Policy, the reasonable business expenses (including air transportation, hotel, and similar expenses) incurred by you in connection with such assistance.  You must present to Cigna for reimbursement all receipts for those expenses within 45 days after you incur the expenses.

 

(7)                                 Promise to Assist with Patent and Copyright Registrations:

 

(A)                               You Promise that, during your Cigna company employment and after your Termination of Employment, you will assist Cigna companies, should they request and at Cigna’s expense, to secure their rights (including any copyrights, patents, trademarks or other intellectual property rights) in or relating to the Inventions in any and all countries, including by:

 

	
(i)
    	
disclosing to Cigna   Companies all pertinent information and data; and
    
	
 
    	
 
    
	
(ii)
    	
executing all   applications, assignments or other instruments necessary to apply for and   obtain these rights and assign them to Cigna companies.
    

 

(d)                                 (1)                                 If you were an Executive Officer at any time during the 24-month period before the date of the Violation, the People Resources Committee will determine whether you engaged in a Violation and will have the sole discretion to waive your obligation to make all or any part of the Payment (described in paragraph 8) and to impose conditions on any waiver.

 

(2)                                 Otherwise, Cigna’s Senior Human Resources Officer, or his or her designee, will determine whether you engaged in a Violation and will have the sole discretion to waive your obligation to make all or any part of the Payment and to impose conditions on any waiver.

 

(3)                                 Determinations of the People Resources Committee, Cigna’s Senior Human Resources Officer, or his or her designee, will be final and binding on all parties.

 

8.                                      Consequences of a Violation: Payment to Cigna

 

Important: This paragraph 8 is not Cigna’s only remedy for a Violation.  Cigna may seek any additional legal or equitable remedy, including an injunction described in paragraph 9, for a Violation.

 

(a)                                 You will immediately forfeit all unvested Shares if you engage in any Violation at any time.

 

(b)                                 You must immediately make the Payment described in paragraph 8(c) to Cigna in the manner described in paragraph 8(d) if:

 

(1)                                 You engage in a Violation described in paragraph 7(c)(2) (compete against Cigna), 7(c)(3) (Solicit or hire Cigna employees) or 7(c)(4) (Solicit Cigna customers), either while you are a Cigna company employee or within 12 months after your Termination of Employment; or

 

(2)                                 You engage in a Violation described in paragraph 7(c)(1) (misconduct), 7(c)(5) (disclose Confidential Information) 7(c)(6) (fail to cooperate) or 7(c)(7) (fail to assist) at any time.

 

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(c)                                  “Payment” is the value you realize from any Shares that vest during the 12-month period ending on the date of the Violation.  The Payment will equal:

 

(1)                                 The number of Shares that vest during that 12-month period;

 

multiplied by

 

(2)                                 The Fair Market Value of those Shares on their Vesting Date;

 

plus

 

(3)                                 The total amount of all dividends, if any, paid to you on those Shares through the date of the Payment.

 

(d)                                 Cigna will recover the Payment from you by any means permitted by applicable law, at the sole discretion of Cigna management, including but not limited to any or all of the following methods:

 

(1)                                 If you have any Shares in a Stock Account or in any other account in book-entry form when a Violation occurs, Cigna will take back from you the whole number of Shares that has a total Fair Market Value as of the date of the Violation up to, but not more than, the Payment amount.

 

(2)                                 Cigna will, to the extent permitted by applicable law, reduce:

 

(A)                               The amount of any payments that any Cigna company owes you for any reason (including without limit any payments owed to you under any nonqualified retirement, deferred compensation or other plan or arrangement) by

 

(B)                               The Payment amount.

 

This reduction will not occur until the date a future payment to you is due.

 

(3)                                 Cigna will send you a written notice and demand for all or part of any Payment amount.  Within 30 days after you receive that notice and demand, you must make the Payment to Cigna.

 

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9.                                      Consequences of a Violation: Injunction

 

You agree that:

 

(a)                                 Cigna will be entitled to ask a court of competent jurisdiction to issue an order (an injunction) that requires you to take action and/or that prohibits you from taking action, as needed to ensure that you keep all of the Promises described in paragraph 7(c)(2) through (7), and Cigna will not be required to post a bond in order to seek or obtain the injunction;

 

(b)                                 Any breach or threatened breach of any of the Promises would cause irreparable injury to Cigna, and monetary damages alone would not provide an adequate remedy; and

 

(c)                                  The remedies described in paragraph 9(a) are in addition to any other rights and remedies Cigna may have at law or in equity.

 

10.                               Consequences of a Violation: Designation of Cigna as Agent and Attorney-in-Fact for Inventions

 

You agree that:

 

(a)                                 If Cigna Companies are unable to obtain your signature on any instruments needed to secure their rights in or relating to the Inventions pursuant to paragraph 7(c)(7)(A); then

 

(b)                                 You hereby appoint Cigna companies and their duly authorized officers as your agents and attorneys in fact to act for and on your behalf to execute and file any documents and take other actions as may be necessary for Cigna companies to secure those rights.

 

11.                               Agreeing to Assume Risks

 

Cigna, its stock plan administrator and its transfer agent will try to process your stock transaction requests in a timely manner; however, Cigna makes no promises or guarantees to you relating to the market price of the Shares or to the time it may take to act on your request to sell the Shares or deliver stock certificates.  By accepting this Restricted Stock grant:

 

(a)                                 You acknowledge that the action you request may not be completed until several days (or in the case of delivery of stock certificates, several weeks) after you submit it.

 

(b)                                 You agree to assume the risks, including the risk that the market price of the Shares may change, related to delays described in paragraph 11(a):

 

	
(1)
    	
Between the time you   ask for any Shares to be sold and the time your Shares are actually sold; and
    
	
 
    	
 
    
	
(2)
    	
Between the time you   ask for stock certificates to be delivered to you or your broker and the time   the certificates are delivered.
    

 

12.                               Applicable Law

 

You understand and agree that:

 

(a)                                 The terms and conditions of this Restricted Stock grant (including any Violation and the consequences of any Violation) and all determinations made under the Restricted Stock Grant Agreement, the Plan, and these Terms and Conditions will be interpreted under the laws of the State of Delaware, without regard to its conflict of laws rule;

 

(b)                                 Any dispute about any of the Promises (described in paragraph 7(c)), if not resolved by agreement between you and Cigna, will be resolved exclusively in a federal or state court in the State of Delaware where venue is appropriate and that has subject matter jurisdiction over the dispute (collectively, “Delaware Courts”);

 

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(c)                                  Delaware is a convenient forum for resolving any dispute about the Promises; and

 

(d)                                 You and Cigna consent to the exercise of personal jurisdiction over the parties by a Delaware Court in any dispute related to the Promises.

 

13.                               Arbitration

 

You agree and understand that:

 

(a)                                 Except as provided in paragraph 12, any dispute over any of the terms and conditions that apply to this Restricted Stock grant will be resolved exclusively under the Cigna Employment Dispute Arbitration Policy and its Rules and Procedures as may be in effect when the dispute arises;

 

(b)                                 You are waiving your right to have those disputes decided by a judge or jury in a court of law, and instead you are agreeing to submit those disputes exclusively to mandatory and binding final arbitration;

 

(c)                                  While you or Cigna may seek emergency, temporary or permanent injunctive relief from a court in accordance with applicable law, after the court has issued a decision about that relief, you and Cigna will submit the dispute to final and binding arbitration under the Cigna Employment Dispute Arbitration Policy; and

 

(d)                                 This arbitration provision will not apply to any dispute related to the Promises.

 

14.                               Miscellaneous

 

(a)                                 If a court of competent jurisdiction determines that any provision of these Terms and Conditions is unenforceable as written, that provision will be enforceable to the maximum extent permitted by law and will be reformed by the court to make the provision enforceable in accordance with Cigna’s intent and applicable law.

 

(b)                                 Cigna’s failure to enforce any provision of this Restricted Stock grant will not be interpreted as a waiver of its right to enforce that provision in the future.

 

15.                               Acceptance

 

If you disagree with any of these Terms and Conditions, including those in paragraphs 7, 8, 9 and 10 YOU MUST NOT ACCEPT THE RESTRICTED STOCK GRANT.  If you sign the Restricted Stock grant, or acknowledge your acceptance electronically or otherwise, you will be:

 

(a)                                 Agreeing to all the terms and conditions of the Restricted Stock grant including the Inventions provision in paragraph 7(b) and the Promises in paragraph 7(c);

 

(b)                                 Warranting and representing to Cigna that you are, and will remain, in full compliance with those terms and conditions;

 

(c)                                  Authorizing Cigna to recover the Payment described in paragraph 8 and seek an injunction described in paragraph 9, if you engage in a Violation; and

 

(d)                                 Appointing Cigna as your agent and attorney-in-fact to secure rights with respect to Inventions if unable to obtain your signature as described in paragraph 10.

 

 

[Year] RSG Grant Agreement including Terms and Conditions

 

12Exhibit 10.5

 

CIGNA STOCK UNIT PLAN

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

 

 

ARTICLE 1

Statement of Purpose

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 2

Definitions

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 3

Authority to Make Restricted Stock Unit Grants

 

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

 

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

 

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

 

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

 

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

 

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ARTICLE 4

Restricted Stock Units

 

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

 

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

 

4.3                               Restrictions on Restricted Stock Units; Vesting.

 

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

 

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

 

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

 

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

 

4.5                               Share Issuance; Voting Rights; Dividends.

 

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

 

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

 

4.6                               Termination of Employment; Change of Control; Death.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 5

Antidilution Provisions

 

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

 

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

 

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

 

ARTICLE 6

Administration of Plan

 

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

 

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

 

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

 

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

 

ARTICLE 7

Amendments

 

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

 

ARTICLE 8

Other Provisions

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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