Document:

Unassociated Document

Exhibit
10.5(b)

AMENDMENT
NO. 1 TO THE 

CIGNA
EXECUTIVE SEVERANCE BENEFITS PLAN

Under
Section 4.1 of the CIGNA Executive Severance Benefits Plan (the “Plan”), CIGNA
Corporation has retained the right to amend the Plan. CIGNA Corporation wishes
to amend the Plan to change the severance benefits payable to executives
terminated following a Change of Control (as defined in the Plan) and to permit
Plan changes following a Change of Control with the consent of affected
executives.

Effective
February 23, 2000, CIGNA Corporation amends the Plan as follows:

 

1. Section
1.19 is amended entirely as follows:

2. New
Section 1.20 is added at the end Article 1:

	
      1.19 
      
	
      “Termination upon a Change of Control”
      means the termination upon or within two (2) years following a Change of
      Control of a Participant's employment with CIGNA (a) initiated by CIGNA or
      a successor, other than a Termination for Cause, or (b) initiated by the
      Participant after determining in the Participant's reasonable judgment
      that there has been a material reduction in the Participant's authority,
      duties or responsibilities, any reduction in the Participant's
      compensation, or any changes caused by CIGNA or successor in the
      Participant's principle office location of more than thirty-five (35)
      miles from its location on the date of the Change of Control. Participant
      shall have notified the Executive Vice President - Human Resources and
      Services or the Chief Executive Officer in writing that he has experienced
      a material reduction, and shall describe the event that he believes
      constitutes a material reduction. The written explanation of reduction
      must be delivered within 30 calendar days after such reduction and at
      least two weeks before termination.

 

	
      1.20 
      
	
      "Covered
      Senior Executive"
      means the following Covered Executives: the Chief Executive Officer of
      CIGNA Corporation, the Chief Operating Officer of CIGNA Corporation and
      the President (or other chief officer) of each CIGNA Corporation operating
      and staff division if the Covered Executive reports directly to either the
      Chief Executive Officer or the Chief Operating Officer of CIGNA
      Corporation.

3. Sections
3.3 and 3.4 are amended entirely as follows:

 

 

	3.3  	
      Basic
      Severance Pay.
      Instead of Basic Severance Pay under Schedule II of the Severance Pay
      Plan, a Terminated Participant’s Basic Severance Pay shall be calculated
      and paid as follows:

	(a)  	
      Basic
      Severance Pay shall equal the Terminated Participant’s base salary rate,
      stated in weekly terms, multiplied by 156 weeks for Covered Senior
      Executives and 104 weeks for all other Covered Executives. The “base
      salary rate” shall be the Terminated Participant's base salary rate
      immediately before the Termination of Employment Date or on the date of
      the Change of Control, whichever rate is
higher.

	(b)  	
      Unless
      the Terminated Participant elects a lump sum payment, Basic Severance Pay
      shall be paid to Covered Senior Executives in 78 equal biweekly
      installments over 156 weeks and to other Covered Executives in 52 equal
      biweekly installments over 104 weeks.

	
      3.4 
      
	
      Supplemental
      Severance Pay.

	(a) 
       	
      Instead
      of Supplemental Severance Pay under Schedule II of the Severance Pay Plan,
      a Terminated Participant’s Supplemental Severance Pay shall be the product
      of the Base Amount described in paragraph 3.4(b) and the applicable
      Multiplier described in paragraph 3.4(c).

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

	 	
      (1)
	
      the
      last bonus actually received by the Terminated Participant;
    or

	 	
      (2)
	
      the
      amount of the Target Award that was applicable to the Terminated
      Participant immediately preceding the Change of Control. “Target Award”
      means (A) the target bonus award established by the Board or Committee for
      determining appropriate levels of incentive compensation payments under
      the CIGNA Management Incentive Plan or the CIGNA Executive Incentive Plan
      or (B) for any position for which no such target award has been
      established, the median level of annual incentive compensation paid for
      executives in comparable positions by a group of competitor companies,
      which median level has been approved by the Board or
      Committee.

	 	
      (c)  
      
	
      The
      Multiplier shall be:

	 	
      (1)
	
      300%
      for Covered Senior Executives; and

	 	
      (2)
	
      200%
      for all other Covered Executives.

	 	
      (d)  
      
	
      Supplemental
      Severance Pay shall be paid to the Terminated Participant in 52 equal
      bi-weekly installments over a two-year period, unless the Terminated
      Participant elects a lump sum payment.

 

2

4. Section
4.1 is amended entirely as follows:

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

 

 

3CIGNA Corporation Exhibit 10.6

Exhibit
10.6

Description
of Severance Benefits for Executives in 

Non-Change
of Control Circumstances

Severance
benefits may be provided to executive level employees whose employment is
terminated because of job elimination or any other reason. The amount of these
benefits is subject to the discretion of the CEO (and, in the case of senior
executives, the People Resources Committee). The following factors are typically
considered in the exercise of such discretion: length of service; the
executive’s total compensation target and the executive’s career plans following
termination of employment with CIGNA.CIGNA Corporation Exhibit 10.8

Exhibit
10.8

CIGNA
LONG-TERM INCENTIVE PLAN

(As
Amended through July 2004)

ARTICLE
1

Statement
of Purpose

 

The CIGNA
Long-Term Incentive Plan (the "Plan") is intended to:

	
      (a)
	
      Provide
      incentives for and reward key employees of the Company 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 senior level Company executives that are
      consistent with the long-range interests of CIGNA Corporation's
      shareholders.

The Plan
is an amendment and restatement as of the Effective Date of the CIGNA Long-Term
Incentive Plan.

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:

	
      2.1
      
	
      "Board" --
      the board of directors of CIGNA Corporation or any duly authorized
      committee of that board.

	
      2.2
	
      "CEO" --
      the Chief Executive Officer of CIGNA
Corporation.

	
      2.3
	
      "Change
      of Control"
      --

 

	 	
      (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 voting power which
      is either (1) more than 50% of the voting power of the shares which voted
      in the election of directors of CIGNA Corporation at the shareholders'
      meeting immediately preceding such determination, or (2) more than 25% of
      the voting power of CIGNA Corporation's outstanding common shares;
      or

 

 

 

	 	
      (b)
	
      As
      a result of a merger or consolidation to which CIGNA Corporation is a
      party, either (1) CIGNA Corporation is not the surviving corporation or
      (2) Directors of CIGNA Corporation immediately prior to the merger or
      consolidation constitute less than a majority of the board of directors of
      the surviving corporation; or

	 	
      (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 (consisting of at least nine
      directors) of the Board.

 

	
      2.4
	
      "Code" --
      the Internal Revenue Code of 1986, as
amended.

	
      2.5
	
      "Committee" --
      the Board's People Resources Committee or any successor committee with
      responsibility for compensation. The number of Committee members and their
      qualifications shall at all times be sufficient to meet the requirements
      of SEC Rule 16b-3 and Code Section 162(m).

	
      2.6
	
      "Common
      Stock" --
      the common stock, par value $0.25 per share, of CIGNA
      Corporation.

 

	
      2.7
	
      "Company" --
      CIGNA Corporation, a Delaware corporation, and/or its
      Subsidiaries.

 

	
      2.8
	
      "Deferred
      Compensation Plan" --
      a Company deferred compensation plan or another arrangement of the Company
      which has been designated by the Committee as a "Deferred Compensation
      Plan" for purposes of this Plan.

 

	
      2.9
	
      "Disability" --
      permanent and total disability as defined in Code Section
      22(e)(3).

 

	
      2.10
	
      "Early
      Retirement" --
      a Termination of Employment, after appropriate notice to the Company, (a)
      on or after age 55 and before age 65 with eligibility for immediate
      annuity benefits under a qualified pension or retirement plan of the
      Company, or (b) upon such terms and conditions approved by the Committee
      or officers of the Company designated by the Board or the
      Committee.

 

 

2

 

	
      2.11
	
      "Effective
      Date" -
      January 1, 2000, subject to approval by the shareholders of CIGNA
      Corporation.

 

	
      2.12
	
      "Eligible
      Employee" --
      a salaried officer or other key employee of the
Company.

	
      2.13
	
      "Exchange
      Act" --
      the Securities Exchange Act of 1934, as
amended.

 

	
      2.14
	
      "Fair
      Market Value" --
      the average of the highest and lowest quoted selling prices as reported on
      the Composite Tape (or any successor method of publishing stock prices) as
      of 4:00 p.m. Eastern time on the date as of which any determination of
      stock value is made. If the Composite Tape (or any successor publication)
      is not published on that date, the determination will be made on the next
      preceding date of publication. In the absence of reported Common Stock
      sales, the Committee will determine Fair Market Value by taking into
      account all facts and circumstances the Committee deems
      relevant.

 

	
      2.15
	
      "Incentive
      Stock Option" --
      an Option described by Code Section 422(b).

	
      2.16
	
      "Nonqualified
      Option" --
      an Option that is not an Incentive Stock
Option.

	
      2.17
	
      "Option" --
      a right granted under Article 5 to purchase one or more shares of Common
      Stock.

	
      2.18
	
      "Option
      Expiration Date" --
      the last date, specified in the Option grant, on which an Option may be
      exercised.

 

	
      2.19
	
      "Participant" --
      an Eligible Employee who has received an award under the
    Plan.

 

	
      2.20
	
      "Payment" --
      the compensation due a Participant, or Participant's estate, under the
      Plan on account of a Unit Award.

	
      2.21
	
      "Payment
      Date" --
      the date that a Qualifying Incentive Plan or a Qualifying Supplemental
      Benefit Plan payment is made (or would have been made if not deferred
      under Section 9.3).

	
      2.22
	
      "Peer
      Group" --
      a group of companies, selected by the Committee, whose financial
      performance is compared to CIGNA Corporation’s under performance goals
      established for Strategic Performance
Units.

 

 

3

 

	
      2.23
	
      "Performance
      Period" --
      the period specified by the Committee for which Unit Awards may be
      made.

	
      2.24
	
      "Performance
      Points" --
      the number of points assigned to a particular year of a Performance Period
      under Section 10.3.

	
      2.25
	
      "Plan" --
      the CIGNA Long-Term Incentive Plan. 

	
      2.26
	
      "Qualifying
      Incentive Plan" --
      any Company bonus plan, short-term or long-term incentive compensation
      plan or any other incentive compensation arrangement, including the
      Company's Performance Recognition Award
Program.

 

	
      2.27
	
      "Qualifying
      Supplemental Benefit Plan" --
      any plan of the Company that pays benefits otherwise payable under a tax
      qualified retirement plan but for legal
limitations.

	
      2.28
	
      "Restricted
      Period" --
      the period during which Common Stock is subject to restrictions under
      Section 7.2.

	
      2.29
	
      "Restricted
      Stock" --
      Common Stock granted under Article 7 that remains subject to a Restricted
      Period.

 

	
      2.30
	
      "Retirement" --
      a Termination of Employment, after appropriate notice to the Company, (a)
      on or after age 65 with eligibility for immediate annuity benefits under a
      qualified pension or retirement plan of the Company, or (b) upon such
      terms and conditions approved by the Committee, or officers of the Company
      designated by the Board or the Committee.

	
      2.31
	
      "SAR" --
      a stock appreciation right granted under Article
6.

	
      2.32
	
      "SEC" --
      the Securities and Exchange Commission.

	
      2.33
	
      "Strategic
      Performance Unit" or
      "Unit"
      --
      the smallest amount of incentive opportunity available for award to a
      Participant for a specified Performance Period, with a target value of
      $75.00 per Unit unless a different target value is established by the
      Committee at the time a Unit Award is made.

	
      2.34
	
      "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.

 

4

	
      2.35
	
      "Termination
      for Cause" --
      a Termination of Employment initiated by the Company on account of the
      conviction of an employee of a felony involving fraud or dishonesty
      directed against the Company.

 

	
      2.36
	
      "Termination
      of Employment" --
      the termination of the Participant's active employment relationship with
      the Company (unless otherwise expressly provided by the Committee) or a
      transaction by which the Participant's employing Company ceases to be a
      Subsidiary.

 

	
      2.37
	
      "Termination
      Upon a Change of Control" --
      a Termination of Employment upon or within two years after a Change of
      Control (a) initiated by the Company or a successor other than a
      Termination for Cause or (b) initiated by a Participant after determining
      in his reasonable judgment that there has been a material reduction in his
      authority, duties or responsibilities, any reduction in his compensation,
      or any change caused by the Company in his office location of more than 35
      miles from its location on the date of the Change of
    Control.

	
      2.38
	
      "Unit
      Award" --
      the assignment of a specific number of Strategic Performance Units to an
      Eligible Employee for a Performance Period.

ARTICLE
3

Participation

3.1   Participation. An
Eligible Employee who receives an authorized award under the Plan shall become a
Participant upon receipt of the award.

3.2  Directors. Members
of the Board who are not employed by the Company are not eligible to participate
in the Plan.

ARTICLE
4

Authorized
Incentive Awards

4.1  Authorized
Awards. The
Plan’s authorized awards are: (a) Options (including Incentive Stock Options);
(b) SARs; (c) Restricted Stock; (d) dividend equivalent rights; (e) Common Stock
in lieu of cash or other awards payable under a Qualifying Incentive Plan or
Qualifying Supplemental Benefit Plan, and (f) Strategic Performance
Units.

4.2  General
Powers of the Committee. Subject
to the requirements of Delaware law, the Committee may in its sole discretion
select Participants and grant them any authorized awards in amounts and
combinations, and upon terms and conditions, as it shall determine. No power or
authority delegated by the Committee to a designee under the Plan may be
exercised (a) to affect the terms and conditions of an award made to anyone
subject to the requirements of Section 16(a) of the Exchange Act or (b) as to
matters reserved to the Board under the Delaware General Corporation
Law.

 

 

5

4.3 General
Powers of the CEO. Subject
to the requirements of Delaware law, the CEO may in his sole discretion select
Participants and grant them any authorized awards in amounts and combinations
and upon terms and conditions as he shall determine, subject to the same
limitations and provisions that apply under the Plan to the Committee, and also
subject to the following:

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

	
      (b)
	
      The
      CEO must be a member of the Board when he grants any award under the Plan
      and must be properly empowered by the Board to grant such award;
      and

	
      (c)
	
      The
      total number of shares of Common Stock which may be issued pursuant to
      awards granted under this Section 4.3 is limited to a maximum of 10% of
      the number of shares of Common Stock authorized to be issued under the
      Plan.

4.4 Term
Limit. No
awards may be made under this Plan after April 25, 2010.

ARTICLE
5

Stock
Options

5.1   General. Subject
to any Plan limitations and provisions, the Committee may grant Options to
Eligible Employees upon terms and conditions that it may establish, including
restrictions on the right to exercise Options.

 

5.2  Option
Price. The
exercise price per share of any Option shall not be less than the Fair Market
Value on the grant date. The Option price may be paid in cash or, if the
Committee so provides, in Common Stock (including Restricted Stock). Common
Stock used to pay the Option price shall be valued using the Fair Market Value
on the Option exercise date. If the Option price is paid in any number of shares
of Restricted Stock:

	(a)  	
      An
      equal number of the shares purchased upon the Option exercise shall be
      Restricted Stock;

	(b)  	
      The
      new Restricted Stock shall be subject to restrictions identical to those
      applicable to the Restricted Stock used to pay the Option price;
      and

 

 

 

6

 

	(c)  	
      The
      restrictions shall continue in effect for the remaining part of the
      Restricted Period applicable to that Restricted
Stock.

5.3   Maximum
Term. No
Option Expiration Date shall be more than 10 years after the Option grant date.
Under Section 5.5, an Option may expire earlier than the Option Expiration Date
specified in the Option grant.

 

5.4   Leave of
Absence. Unless
otherwise expressly provided by the Committee, no Option may be exercised during
a leave of absence except to the extent exercisable immediately before the start
of the leave. Termination of Employment during a leave of absence shall be
treated under Section 5.5 the same as Termination of Employment during a period
of active employment.

	
      5.5
	
      Expiration
      of Options. 

	
      (a)
	
      Except
      as provided elsewhere in Section 5.5, any outstanding Option held by a
      Participant at Termination of Employment shall expire on the date of
      Termination of Employment.

	(b)          	
      Any
      outstanding Option held by a Participant at Termination Upon a Change of
      Control shall:

	(1)  	
      If
      granted on or after the Effective Date, become exercisable no later than
      the date of his Termination of Employment; and

	(2)  	
      Expire
      on the earlier of 3 months from the date of Termination of Employment or
      the Option Expiration Date.

	
      (c)
	
      Any
      outstanding Option granted on or after February 24, 1999 and held by a
      Participant at Termination of Employment due to death, Disability, Early
      Retirement or Retirement shall become or remain exercisable in accordance
      with the terms and conditions established by the Committee at the time of
      grant.

	
      (d)
	
      Any
      outstanding Nonqualified Option granted before February 24, 1999 and held
      by a Participant at Termination of Employment due to death, Disability or
      Retirement shall become exercisable in accordance with conditions imposed
      by the Committee, at time of grant or thereafter, and remain fully
      exercisable until the Option Expiration
Date.

 

	
      (e)
	
      The
      exercise period of any outstanding Nonqualified Option granted before
      February 24, 1999 and held by a Participant at Termination of Employment
      due to Early Retirement may, at the sole discretion of the Committee or
      its designee be extended until a date determined by the Committee or its
      designee, but not later than the Option Expiration
Date.

 

 

 

7

5.6  Option
Replacements; Repricing. Without
prior approval of CIGNA Corporation shareholders, the Committee may not cancel a
previously granted Option and grant a replacement Option if the new Option
exercise price is lower than that of the canceled Option.

5.7  Automatic
Option Grants.The
Committee may provide that, to the extent a Participant pays the Option price of
an Option granted under the Plan in Common Stock, a new Option will
automatically be granted to the Participant, subject to the following terms and
conditions (and any other terms and conditions the Committee may deem
appropriate):

	(a)         
       	
      The
      Option price per share of any new Option shall not be less than the Fair
      Market Value on the date of the automatic
grant;

	
      (b)
	
      The
      date of the automatic grant of the new Option shall be the date the former
      Option is exercised; and

	
      (c)
	
      The
      term of the new Option shall not extend beyond the Option Expiration Date
      of the former Option.

5.8 Incentive
Stock Options. The
following terms and conditions shall apply to any Options granted under the Plan
that are identified as Incentive Stock Options.

	(a)        
        	
      Incentive
      Stock Options may be granted only to Eligible Employees who are employed
      by CIGNA Corporation or a corporation that is either a direct Subsidiary
      or an indirect Subsidiary through an unbroken chain of
      corporations.

	(b)          	
      No
      Incentive Stock Option may be granted after December 13,
    2009.

	(c)        
        	
      No
      Incentive Stock Option may be granted to any person who, at the time of
      grant, owns (or is deemed to own under Code Section 424(d)) shares of
      outstanding Common Stock possessing more than 10% of the total combined
      voting power of all classes of stock of CIGNA Corporation or a Subsidiary,
      unless the Option exercise price is at least 110% of the Fair Market Value
      of the stock subject to the Option and the Option by its terms is not
      exercisable after the expiration of five years after the Option grant
      date.

	
      (d)
	
      To
      the extent that the aggregate Fair Market Value of stock with respect to
      which the Incentive Stock Options first become exercisable by a
      Participant in any calendar year exceeds $100,000 (taking into account
      both Common Stock subject to the Incentive Stock Options under this Plan
      and stock subject to Incentive Stock Options under all other Company
      plans, if any), such Options shall be treated as Nonqualified Options. For
      this purpose the Fair Market Value of the stock subject to Options shall
      be determined as of the date the Options were awarded. In reducing the
      number of options treated as Incentive Stock Options to meet the $100,000
      limit, the most recently granted Options shall be reduced first. To the
      extent a reduction of simultaneously granted Options is necessary to meet
      the $100,000 limit, the Committee may, in the manner and to the extent
      permitted by law, designate which shares of Common Stock are to be treated
      as shares acquired pursuant to the exercise of an Incentive Stock
      Option.

 

 

 

8

 

	
      (e)
	
      Any
      grant of Incentive Stock Options shall include whatever terms and
      conditions are required to meet the requirements of Code Section
      422.

ARTICLE
6

Stock
Appreciation Rights

6.1   General. Subject
to Article 6, and upon terms and conditions it may establish, the Committee may
grant SARs to Eligible Employees who are granted Options under the
Plan.

 

6.2   Rights and
Options. Each SAR
shall relate to a specific Option granted under the Plan and may be granted at
the same time as the related Option or later.

 

6.3   Nature of
Rights. The SAR
shall entitle an Option holder to receive upon exercise of the SAR, without
payment to the Company, a number of shares of Common Stock determined by
multiplying (a) and (b) and dividing the result by (c):

	
      (a)
	
      Total
      number of shares subject to the related Option that the Option holder
      designates for SAR exercise, up to the maximum number he may purchase
      under the related Option as of the SAR exercise
date;

	
      (b)
	
      Excess
      of (1) the Fair Market Value of a share of Common Stock on the SAR
      exercise date over (2) the Fair Market Value of a share of Common Stock on
      the grant date of the SAR or the related Option (as specified by the
      Committee upon grant of the SAR); and

	
      (c)
	
      Fair
      Market Value of a share of Common Stock on the SAR exercise
      date.

6.4   Cash
Payments. The
Committee may provide that, instead of issuing shares upon the SAR exercise, the
Company shall pay cash equal to the Fair Market Value, on the SAR exercise date,
of some or all the shares that would otherwise be issued upon the SAR
exercise.

 

6.5   Related
Options. Shares
under an Option shall be used not more than once to calculate a number of shares
or cash to be received upon exercise of a related SAR. Upon exercise of an SAR
the related Option shall be canceled to the extent of the number of shares used
in the calculation under Section 6.3(a). That number of shares will be
subtracted from the number of shares available under the Option immediately
before the SAR exercise to determine the remaining number of shares, if any,
which may be issued upon any future exercise of the related Option or SAR.

 

 

 

9

 

6.6  Termination
of Employment. A
Participant may exercise an SAR after Termination of Employment only to the
extent and upon the conditions that related Option may be exercised after
Termination of Employment.

ARTICLE
7

Restricted
Stock Grants

7.1   General. Subject
to any limitations and provisions in the Plan, the Committee may grant
Restricted Stock to Eligible Employees upon terms and conditions it may
establish. The consideration for a Restricted Stock grant may be solely in the
form of the recipient's services rendered to the Company, or it may be any other
lawful form of consideration the Committee may determine.

 

7.2   Restricted
Period. Except
as provided below, Restricted Stock shall not be sold, transferred, assigned,
pledged or otherwise disposed of by the Participant during the Restricted Period
established by the Committee. Restricted Stock may be used to pay the exercise
price of Options under Section 5.2. The Committee may establish different
Restricted Periods and different restriction terms for shares contained in a
single Restricted Stock grant. No more than 5% of the Restricted Stock granted
under the Plan shall have a Restricted Period less than three
years.

 

7.3   Issuance;
Voting Rights; Dividends.
Restricted Stock granted to a Participant shall be issued by the Company as of
the date of the grant. During the Restricted Period, the Participant shall be
entitled to vote the shares. The Committee may provide for the current payment
of dividends on shares of Restricted Stock to the holders of such shares. Shares
issued as a result of stock dividends, splits or reclassifications, to the
extent the issued shares relate to Restricted Stock, shall be subject to the
same limitations, restrictions and provisions that are applicable to the related
Restricted Stock.

7.4   Termination
of Employment.

	
      (a)
	
      Except
      as provided below, Restricted Stock (and all related rights) owned by a
      Participant at Termination of Employment during a Restricted Period shall
      be forfeited to the Company immediately upon Termination of Employment
      (unless otherwise expressly provided by the
Committee).

	
      (b)
	
      If
      a Participant's Termination of Employment during a Restricted Period is
      due to Retirement, the Committee or its designee (in the sole discretion
      of either) may provide before the Participant's Retirement that the
      Restricted Period applicable to any Restricted Stock owned by the
      Participant shall lapse immediately upon the Participant's Retirement.
      

 

 

 

10

	
      (c)
	
      If
      a Participant’s Termination of Employment during a Restricted Period is a
      Termination Upon a Change of Control or is due to death or Disability, the
      Restricted Period applicable to any Restricted Stock owned by the
      Participant shall lapse immediately on date of Termination of
      Employment.

7.5   Leave
of Absence. The
Committee shall determine the effect of approved leaves of absence on applicable
Restricted Periods. No Restricted Period, however, may lapse during an approved
leave of absence unless expressly provided by the Committee.

ARTICLE
8

Dividend
Equivalent Rights

8.1   General. Subject
to the limitations and provisions of the Plan, the Committee may grant dividend
equivalent rights to Eligible Employees upon terms and conditions it may
establish. The consideration for stock issued pursuant to dividend equivalent
rights may be solely in the form of the recipient's services rendered to the
Company, or it may be any other lawful form of consideration as the Committee
may determine.

 

 8.2 Rights
and Options. Each
right may relate to a specific Option granted under the Plan and may be granted
to the Option holder at the same time as the Option grant or later, or each
right may be independent of any Option.

 

8.3 Nature
of Rights. The
right shall entitle a holder to receive, for a period of time to be determined
by the Committee, a payment equal to the quarterly dividend declared and paid by
the Company on one share of Common Stock. If the right relates to a specific
Option, the period shall not extend beyond the earliest of the date the Option
is exercised, the date any related SAR is exercised, or the Option Expiration
Date.

 

8.4 Payments. The
Committee shall determine at time of grant whether payment pursuant to a right
shall be immediate or deferred and whether made in cash or Common Stock, or a
combination of both. If immediate, the Company shall make payments pursuant to
each right within 90 days after the Company has paid the quarterly dividend to
holders of Common Stock. If deferred, the payments shall accumulate (with
interest computed in a manner to be determined by the Committee) until a date or
event specified by the Committee and then shall be made within 90 days after the
occurrence of the specified date or event, unless the right is forfeited under
the terms of the Plan.

 

8.5  Termination
of Employment. Any
dividend equivalent right held by a Participant at Termination of Employment for
any reason shall be forfeited to the Company immediately upon Termination of
Employment, unless otherwise expressly provided by the Committee.

11

ARTICLE
9

Common
Stock in Place of Other Awards

9.1   General.
The
Committee may grant an Eligible Employee Common Stock (including Restricted
Stock) instead of all or a portion (determined by the Committee) of an award
otherwise payable under a Qualifying Incentive Plan or Qualifying Supplemental
Benefit Plan. The grant shall be for a number of shares of Common Stock that
have an aggregate Fair Market Value, determined as of the Payment Date, equal to
the amount of the award being replaced by the Common Stock.

 

9.2   Death;
Termination of Employment. Unless
the Committee, in its sole discretion, provides otherwise, a Common Stock grant
approved under Section 9.1 for a Participant whose Termination of Employment
occurs before the Payment Date shall still be granted. If the reason for
Termination of Employment is the Participant's death, the grant shall be made to
the Participant's spouse (or Participant's estate if there is no surviving
spouse).

9.3   Deferral of
Payments. A Common
Stock grant approved under Section 9.1 shall be deferred if the Participant had
elected to defer the underlying award under a Deferred Compensation Plan,
subject to the provisions of the Deferred Compensation Plan and Section 10.7(d)
of this Plan. Common Stock that would have been issued but for deferral under
this provision shall be issued under this Plan at the end of the deferral
period. 

ARTICLE
10

Strategic
Performance Units

10.1   Award of
Units.

	
      (a)
	
      The
      Committee may in its sole discretion grant Unit Awards to Eligible
      Employees selected for participation for a Performance
    Period.

	
      (b)
	
      The
      CEO or his designee may grant a Unit Award to a person who becomes an
      Eligible Employee during a Performance Period as long as that Unit Award
      is (1) in accordance with guidelines approved by the Committee or (2)
      subject to ratification by the Committee before any resulting Unit Award
      Payment is made.

	
      (c)
	
      No
      Eligible Employee may receive more than 100,000 Units during any calendar
      year.

10.2   Performance Goals;
Financial Measures. When the
Committee grants Unit Awards for a particular Performance Period, it
shall:

 

 

12

	
      (a)
	
      Establish
      in writing the objective performance goals and the financial measurements
      to be used to measure the Company’s
performance;

	
      (b)
	
      Determine
      the length of the Performance Period and, if the performance goals and
      financial measurements require comparing the Company's financial results
      to those of a Peer Group, the composition of the Peer
    Group;

	
      (c)
	
      Determine
      the annual scoring formula or method for assigning Performance Points to
      each year of the Performance Period; and

	
      (d)
	
      Determine
      the payout formula for converting Performance Points for the Performance
      Period into the preliminary Unit dollar
value.

The
financial measurements shall be one or more of the following: return on equity,
adjusted return on equity, earnings, revenue growth, expense ratios or other
expense management measures and total shareholder return.

10.3   Performance
Points. A number
of Performance Points will be assigned to each year of a Performance Period
under the annual scoring formula or method under Section 10.2(c). Based upon the
Committee's assessment of factors which affected financial results, the
Committee may adjust downward the number of Performance Points for each or any
year in the Performance Period, but the adjustment shall not exceed 10% of the
maximum number of available annual points. The Performance Points for each year
of a Performance Period will be added to compute the total number of Performance
Points to be used in valuing Units for the entire Performance
Period.

10.4   Value of
Units. The
number of Performance Points computed for the Performance Period and the
Performance Period payout formula under Section 10.2(d) will determine the
preliminary dollar value of a Strategic Performance Unit for the Performance
Period. The preliminary value may be adjusted downward by the Committee based
upon the Committee's evaluation of CIGNA Corporation's strategic accomplishments
over the Performance Period. The maximum amount of the downward adjustment per
Unit shall not exceed $25.00. The final value of each Strategic Performance Unit
shall not exceed $200.00. To the extent required by Code Section 162(m), before
Payment of any Unit Award the Committee shall certify in writing that the Unit
value for a Performance Period is based on the attainment of the
pre-established, objective performance goals for the Performance
Period.

10.5   Unit
Award Payment. 

	
      (a)
	
      As
      soon as practicable after the close of a Performance Period, the Units
      shall be valued and the Company shall make Payments to Participants with
      Unit Awards.

 

 

13

 

	
      (b)
	
      A
      Participant's Unit Award Payment for a Performance Period shall equal the
      value of one Strategic Performance Unit, determined under Section 10.4,
      multiplied by the number of Units in the Participant’s Unit
      Award.

	(d)        
       	
      Notwithstanding
      the above, the Committee in its sole discretion may reduce the amount of
      any Payment to any Participant, eliminate entirely the Payment to any
      Participant, or defer the Payment until a later date or occurrence of a
      particular event. The Committee's authority under this Section 10.5(c)
      shall expire immediately upon a Change of
Control.

10.6   Eligibility for
Payments.

	
      (a)
	
      Except
      for Payments described in Section 10.6 (b) and (c), and except in the
      event of a Termination Upon a Change of Control, a Participant shall be
      eligible to receive a Unit Award Payment for a Performance Period only if
      the Participant has been employed by the Company continuously from the
      date of Participant's Unit Award through the date of
    Payment.

	
      (b)
	
      For
      the purposes of this Section 10.6, a leave of absence of less than three
      months' duration with the approval of the Company is not considered to be
      a break in continuous employment. In the case of a leave of absence of
      three months or longer:

	 	
      (1)
	
      The
      Committee, based on the recommendation of the CEO, shall determine whether
      or not the leave of absence constitutes a break in continuous employment
      for purposes of a Unit Award Payment; and

	 	
      (2)
	
      If
      a Participant is on a leave of absence on the date that the Unit Award
      Payment is to be made, the Committee may require that the Participant
      return to active employment with the Company at the end of the leave of
      absence as a condition of receiving the Payment, and any determination as
      to eligibility for a Payment may be deferred for a reasonable period after
      such return.

	
      (c)
	
      If
      the employment of a Participant is terminated by reason of Retirement,
      death or Disability after receipt of a Unit Award but before the related
      Payment is made, the Committee or its designee shall determine whether a
      Payment shall be made to or on behalf of such Participant, and whether the
      Payment, if made, shall be in full or prorated based on factors determined
      in the sole discretion of the Committee, or its designee. Any such Payment
      shall be made to the Participant or the Participant's
    estate.

	
      (d)
	
      In
      the event of a Termination Upon a Change of Control of a Participant after
      the Participant receives a Unit Award but before the related Payment is
      made, a Payment in cash shall be made to the Participant within 30 days
      following the Termination Upon a Change of Control. The amount of the
      Payment shall equal the total number of Units contained in all Unit Awards
      held by the Participant as of the date of his Termination Upon a Change of
      Control multiplied by the greatest of:

 

 

 

14

 

	 	
      (1)
	
      The
      Unit target value;

	 	
      (2)
	
      The
      highest value established by the Committee for Unit Awards for which any
      Payments were made to any Participants during the twelve-month period
      immediately preceding the date of Participant's Termination Upon a Change
      of Control; or

	 	
      (3)
	
      The
      average of the highest values established by the Committee for the last
      two Unit Awards paid to any Participants before the Participant's
      Termination Upon a Change of Control.

10.7   Form
of Payment.

	
      (a)
	
      Except
      as otherwise provided in Section 10.6(d), Unit Award Payments shall be
      made in cash, shares of Common Stock (including Restricted Stock), Options
      or a combination of any of these forms of Payment, as determined by the
      Committee in its sole discretion.

	
      (b)
	
      If
      a Payment is made wholly or partially in shares of Common Stock, the
      Payment shall be made in a number of whole shares. That number of shares
      shall have an aggregate Fair Market Value that most closely approximates,
      but does not exceed, the dollar amount of the Payment if made in
      cash.

	
      (c)
	
      A
      Participant's Payment may be deferred under the Deferred Compensation
      Plan. Common Stock that would have been issued but for deferral under this
      provision shall be issued under this Plan at the end of the deferral
      period.

	
      (d)
	
      In
      case of any deferral under Section 9.3 or 10.7(c), the rate of return that
      may be credited upon the deferred compensation shall comply with
      requirements under Code Section 162(m), if applicable, so as not to be
      considered an impermissible increase in
compensation.

 

	10.8     
       	
      Future
      Unit Award Not Guaranteed. A
      Unit Award for a Performance Period is not intended to be, or to be
      construed as, a right to receive another Unit Award in any later
      Performance Period. A Unit Award for any Performance Period shall be
      evidenced only by the grant to the Eligible Employee by the Committee (or
      CEO) of a Unit Award.

 

 

15

 

ARTICLE
11

Shares
Authorized under the Plan

 

11.1   Maximum Number
Authorized. The
number of shares of Common Stock authorized to be issued pursuant to Options,
SARs, rights, grants or other awards under this Plan shall be 25 million. Of
that number 15 million shares (after adjustment for a 3-for-1 stock split in May
1998) were authorized by CIGNA Corporation shareholders at the annual
shareholders meeting on April 26, 1995, and 10 million shares were authorized by
CIGNA Corporation shareholders at the annual shareholders meeting on April 26,
2000. No more than 20% of the number of shares authorized for issuance under the
Plan may be awarded or granted under Articles 7, 8, 9 and 10 in the form of
Common Stock (including Restricted Stock).

11.2   Maximum Number Per
Participant. The
aggregate number of shares of Common Stock subject to Options and SARs that may
be granted during any calendar year to any individual shall be limited to
2,500,000.

 

11.3   Unexercised Options,
Grant Forfeitures and Options Exercised with Common Stock. There
shall be available for further awards under this Plan:

	
      (a)
	
      Common
      Stock under Options granted under the Plan if the Options expire or are
      canceled or surrendered;

	
      (b)
	
      Restricted
      Stock granted under the Plan if the Restricted Stock is forfeited under
      Section 7.4 or is otherwise surrendered to the Company before the
      Restricted Period expires; 

	
      (c)
	
      Common
      Stock used by a Participant as full or partial payment to the Company upon
      exercise of an Option granted under this
Plan;

	
      (d)
	
      Common
      Stock withheld by, or otherwise remitted to, the Company to satisfy a
      Participant's tax withholding obligations upon the lapse of restrictions
      on Restricted Stock or the exercise of Options or SARs granted under the
      Plan or upon any other payment or issuance of shares under the
      Plan.

11.4   No
Fractional Shares. No
fractional shares of Common Stock shall be issued, accepted as payment of an
Option exercise price or remitted to meet tax-withholding obligations under the
Plan.

 

11.5   Source of
Shares. Common
Stock may be issued from authorized but unissued shares or out of shares held in
CIGNA Corporation's treasury, or both.

 

 

16

ARTICLE
12

Antidilution
Provisions

 

Except as
expressly provided under the Plan, the following provisions shall apply to all
shares of Common Stock (including Restricted Stock) authorized for issuance and
all Options granted under the Plan:

12.1   Stock
Dividends, Splits, Etc. In the
event of a stock dividend, stock split, or other subdivision or combination of
the Common Stock:

	(a)         
       	
      The
      number of authorized shares of Common Stock, and any numerical share
      limits, under the Plan will be adjusted proportionately;
    and

	
      (b)
	
      There
      will be a proportionate adjustment in the number of shares of Common Stock
      subject to unexercised stock Options and related SARs, and in the per
      share Option exercise price (but without adjustment to the aggregate
      Option exercise price) and in the number of shares of Restricted Stock
      outstanding.

12.2   Merger, Exchange or
Reorganization. If 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 (an “Event”), appropriate
adjustment shall be made by the Committee in the number of shares and kind of
Restricted Stock and Common Stock for which Options, SARs and other rights may
be or may have been awarded under this Plan, so that the proportionate interests
of Participants shall be maintained as before the Event. However, in case of any
contemplated Event which may constitute a Change of Control, the Committee, with
the approval of a majority of the members of the Board who are not then
Participants, may modify any and all outstanding Restricted Stock, Options, SARs
and other rights (except those deferred under Section 9.3), so as to accelerate,
as a consequence of or in connection with the Event, the vesting of a
Participant's right to exercise any such Options or SARs or the lapsing of the
Restricted Periods for shares of Restricted Stock or the accelerated payment of
any deferred dividend equivalent rights.

ARTICLE
13

Administration
of Plan

 

13.1   General
Administration. The Plan
shall be administered by the Committee, subject to any requirements for review
and approval by the Board that the Board may establish.

13.2   Administrative
Rules. 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.

 

 

17

 

13.3   Committee Members Not
Eligible. No
member of the Committee shall be eligible to participate in this
Plan.

 

13.4  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 Eligible Employees, Participants and other persons claiming rights under
the Plan.

ARTICLE
14

Amendments

 

All
amendments to this Plan shall be in writing and shall be effective when approved
by the Board. A Plan amendment shall not be effective without the prior approval
of CIGNA Corporation shareholders if necessary under Internal Revenue Service or
SEC regulations, or the rules of the New York Stock Exchange or any applicable
law. The Board may make any changes required to conform the Plan and Option
agreements or grants with applicable Code provisions and regulations relating to
Incentive Stock Options. Unless otherwise expressly provided by an amendment or
the Board, no amendment to this Plan shall apply to grants of Options, SARs,
other rights or Restricted Stock made before the effective date of the
amendment. To the extent any provision of this Plan (as amended and restated as
of January 1, 2000) amends any provision of the Plan as in effect before the
Effective Date, however, unless otherwise expressly provided the amendments
shall apply to grants made before the Effective Date. Otherwise, a Participant's
rights under any Plan grants or awards, including any rights under paragraph
10.6(d), and a transferee's rights relating to any transferred derivative
securities, may not be abridged by any amendment, modification or termination of
the Plan without his individual consent.

ARTICLE
15

Other
Provisions

 

15.1   Effective
Date. The Plan
as amended and restated is effective as of January 1, 2000, subject to approval
by the shareholders of CIGNA Corporation.

 

15.2   Duration
of the Plan. The Plan
shall remain in effect until all Options and rights granted under the Plan have
been satisfied by the issuance of Common Stock or terminated under the terms of
this Plan, all Restricted Periods applicable to Restricted Stock granted under
the Plan have lapsed, and all Performance Periods related to Unit Awards granted
under the Plan have expired, and all related Unit Award Payments have been made.

 

 

18

15.3   Early
Termination.
Notwithstanding Section 15.2, the Board may terminate this Plan at any time; but
no such action by the Board shall adversely affect the rights of Participants
which exist under this Plan immediately before its termination.

 

15.4   General
Restriction. No
Common Stock issued pursuant to this Plan shall be sold or distributed by a
Participant until all appropriate listing, registration and qualification
requirements and consents and approvals have been obtained, free of any
condition unacceptable to the Board. In no event shall the value, amount or form
of consideration for any award under the Plan be less than the value or amount,
or in other than the form, required by applicable Delaware law.

 

15.5   Awards
Not Assignable.

	
      (a)
	
      No
      derivative security (as defined in rules promulgated under Exchange Act
      Section 16), including any right to receive Common Stock (such as Options,
      SARs or similar rights) or any right to payment under the 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. Any right to receive Common Stock
      or any other derivative security (including Options, SARs or similar
      rights) shall be exercisable during a Participant's lifetime only by the
      Participant or by the Participant's guardian or legal
      representative.

	
      (b)
	
      Notwithstanding
      Section 15.5(a), the Committee shall have the authority, in its
      discretion, to grant (or to sanction by way of amendment of an existing
      grant) derivative securities (other than Incentive Stock Options) which
      may be transferred without consideration by the Participant during his
      lifetime to any member of his immediate family, to a trust established for
      the exclusive benefit of one or more members of his immediate family, to a
      partnership of which the only partners are members of his immediate
      family, or to such other person as the Committee shall permit. In the case
      of a grant, the written documentation containing the terms and conditions
      of such derivative security shall state that it is transferable, and in
      the case of an amendment to an existing grant, such amendment shall be in
      writing. A derivative security transferred as contemplated in this Section
      15.5(b) may not be subsequently transferred by the transferee except by
      will or the laws of descent and distribution and shall continue to be
      governed by and subject to the terms and limitations of the Plan and the
      relevant grant. The Committee, in its sole discretion at the time the
      transfer is approved, may alter the terms and limitations of the relevant
      grant and establish such additional terms and conditions as it shall deem
      appropriate. As used in this subparagraph, "immediate family" shall mean,
      as to any person, a spouse, any child, stepchild or grandchild, and shall
      include relationships arising from legal adoption.

 

 

 

19

15.6   Withholding
Taxes. Upon the
exercise of any Option or SAR, the vesting of any Restricted Stock, or payment
of any award described in Section 4.1(d), (e) or (f), or upon the exercise of an
Incentive Stock Option prior to the satisfaction of the holding period
requirements of Code Section 422, 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 applicable federal, state and local
      withholding taxes; or

	
      (b)
	
      deduct
      from any amount payable the amount of any taxes the Company may be
      required to withhold because of the
transaction.

The
Committee may require or permit the Participant to remit all or part of the
required withholding amount in Common Stock (other than Restricted Stock). The
remitted Common Stock may be shares deliverable to the Participant because of
the transaction giving rise to the withholding obligation (in which case the
number of shares of Common Stock delivered to a Participant shall be reduced by
the number of shares so remitted) or shares the Participant has owned without
restriction for at least six months as of the date the withholding obligation
arises. If the Committee permits a Participant to elect to remit Common Stock,
the election shall be made on or before the date the withholding obligation
arises and be subject to the disapproval of the Committee. The Committee may
establish any additional conditions it deems appropriate. The value of any
remitted Common Stock shall be its Fair Market Value as of the date the
withholding obligation arises.

15.7   Book
Entry; Certificates. A book
entry shall be made in the electronic share ownership records maintained by the
Company or the Company’s transfer agent as evidence of the issuance of Common
Stock to a Participant (or beneficiary) upon a Restricted Stock grant, the
exercise of an Option or any other grant or payment of Common Stock under the
Plan. The Company or its transfer agent shall deliver to any Participant (or
beneficiary), upon his request and subject to his compliance with applicable
administrative procedures the Company or its transfer agent may establish, a
certificate for any of the shares evidenced by book entry. A certificate for
Restricted Stock, however, will not be delivered until the applicable Restricted
Period has expired.

15.8   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.

15.10   Termination
of Employment. The
Company retains the right to terminate the employment of any employee at any
time for any reason or no reason, and an award or grant under the Plan to an
Eligible Employee is not, and shall not be construed in any manner to be, a
waiver of that right.

 

 

20

15.11   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.

15.12   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.

 

 

 

 

 

21

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