Document:

Exhibit 4.1

 

 

Strictly Confidential

 Private Circulation only

EMPLOYEES STOCK OPTION

SCHEME – 2000

 

(As amended up to June 25,2012)

 

  

  

  

 

 

ICICI BANK EMPLOYEES STOCK OPTION SCHEME - 2000

	
Section I:

	
Short title, extent and commencement

	
  

	
1.

	
This Scheme may be called ICICI Bank Employees Stock Option Scheme - 2000.

	
  

	
2.

	
It applies only to Eligible Employees.

	
Section II:

	
Objectives

The objectives of the Scheme are:

	
  

	
a)

	
to enhance employee motivation;

	
  

	
b)

	
to enable employees to participate in the long term growth and financial success of the Bank; and

	
  

	
c)

	
to act as a retention mechanism, by enabling employee participation in the business as an active stakeholder to usher in an 'owner-manager' culture.

	
Section III:

	
Definitions

 

 

	
  

	
1.

	
As used in this Scheme, the following terms shall have the meanings set forth below :

 

	
  

	
a.

	
"Award Confirmation" means a written communication by the Bank to a Participant, evidencing grant of Options.

	
  

	
b.

	
"Cause" means (i) act of willful or gross misconduct or neglect    (ii) the commission of felony, fraud, misappropriation, embezzlement, breach of trust or an offence involving moral turpitude, (iii) gross or willful insubordination or (iv) any other act detrimental to the interest of the Bank.

	
  

	
c.

	
“Committee” means a committee of the Board of Directors of the Bank consisting of a majority of Independent Directors as the Board of Directors of the Bank may constitute from time to time to administer the Scheme.

	
  

	
d.

	
"Bank" means ICICI Bank Limited (ICICI Bank) and its successors or its Subsidiary or Holding Company, as the context may require or admit.

	
  

	
e.

	
"Eligible Employee" means permanent employee or a director of the Bank or of a Subsidiary or a Holding Company.

 

  

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f.

	
"Exercise Period" means the period commencing from the date of vesting of Options and ending on the later of (i) the tenth anniversary of the date of grant of Options or (ii) the fifth anniversary of the date of vesting of Options.

	
  

	
g.

	
"Exercise Price" means the price payable by the Participant for exercising the Options granted to him.

	
  

	
h.

	
"Holding Company" means a holding company of ICICI Bank, hereafter existing, within the meaning of Section 4 of the Companies Act, 1956.

	
  

	
i.

	
"Independent Director" means a director of the Bank, not being a whole time director of the Bank.

	
  

	
j.

	
"Option" means a right but not an obligation granted to a Participant to apply for a specified number of Shares at a pre -determined price during the Exercise Period subject to the conditions of the Scheme.

	
  

	
k.

	
"Participant" means an Eligible Employee selected by the Committee and to whom an Option is granted, or the Successors of the Participant, as the context so requires.

	
  

	
l.

	
"Person" means an individual, company, partnership, association, trust, unincorporated organisation, government or political subdivision thereof or any other entity.

	
  

	
m.

	
"Scheme" means this Scheme.

	
  

	
n.

	
"Shares" mean the equity shares of the Bank or such other securities, as may be designated by the Committee from time to time.

	
  

	
o.

	
"Subsidiary" means a subsidiary company of ICICI Bank, whether now or hereafter existing, within the meaning of Section 4 of the Companies Act, 1956.

	
  

	
p.

	
"Successors" of a Participant means the legal heirs and/or legal representatives of a deceased Participant.

	
  

	
q.

	
"Vesting Confirmation" means a written communication by the Bank to a Participant, evidencing vesting of Options.

	
  

	
r.

	
"Vesting Criteria" means criteria as may be stipulated by the Committee for vesting of Options.

	
  

	
s.

	
"Vesting Period" means the period during which the vesting of the Options granted to a Participant can take place.

 

  

3

  

 

	
  

	
2.

	
In the Scheme, unless the contrary intention appears:

	
  

	
(a)

	
a reference to "law" includes the constitution, any statute, law rule, regulation, ordinance, judgement, order, decree, authorisation, or any published directive, guideline, requirement or governmental restriction having the force of law, or any determination by, or interpretation of any of the foregoing by, any judicial authority or administrative authority, whether in effect as of the date of the Scheme or thereafter and each as amended from time to time;

	
  

	
(b)

	
reference to a gender shall include references to the female, male and neuter genders; and

	
  

	
(c)

	
the singular includes the plural (and vice versa).

	
  

	
3.

	
Words and expressions unless defined herein shall have the same meaning as have been assigned to them under the Companies Act, 1956 or the Securities and Exchange Board of India Act, 1992.

 

 

	
Section IV:

	
Shares subject to the Scheme

	
  

	
1.

	
1The maximum number of Options granted to any Eligible Employee in a financial year shall not exceed 0.05% of the issued

 

1 Effective May 3, 2002 the date upon which the Scheme of Amalgamation of ICICI Limited, ICICI Capital Services Limited and ICICI Personal Financial Services Limited with ICICI Bank Limited came into effect, Section IV Part I of the Employee Stock Option Scheme had been amended as under:

in place of the words ‘The maximum number of Options granted to any Eligible Employee in a financial year shall not exceed 0.05% of the issued equity shares of the Bank at the time of grant of the Options and the aggregate of all such options granted to the Eligible Employees shall not exceed five per cent of the aggregate number of issued equity shares of the Bank as on March 31, 2000’

the words ‘The maximum number of Options granted to any Eligible Employee in a financial year shall not exceed 0.05% of the issued equity shares of the Bank at the time of grant of the Options and the aggregate of all such options granted to the Eligible Employees shall not exceed five per cent of the aggregate number of  the issued equity shares of the Bank after coming into effect of the amalgamation of  ICICI Limited, ICICI Capital Services Limited and ICICI Personal Financial Services Limited with ICICI Bank Limited and the issuance of equity shares by the Bank pursuant to the aforesaid amalgamation’ had been replaced.

Further, Section IV Part I is amended with the approval of the Members at their Tenth Annual General Meeting held on September 20, 2004 as under:

The maximum number of Options granted to any Eligible Employee in a financial year shall not exceed 0.05% of the issued equity shares of the Bank at the time of grant of Options and the aggregate of all such Options granted to the Eligible Employees shall not exceed five per cent of the aggregate of the number of issued equity shares of the Bank, from time to time, on the date(s) of grant of Option(s).

Further, Section IV is amended with the approval  of the Members at their Eighteenth Annual General Meeting held on  June 25, 2012 as under :

The maximum number of Options granted to any Eligible Employee in a financial year shall not exceed 0.05% of the issued equity shares of the Bank at the time of grant of Options and the aggregate of all such Options granted to the Eligible Employees shall not exceed ten per cent of the aggregate of the number of issued equity shares of the Bank, from time to time, on the date(s) of grant of Option(s).

 

  

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equity shares of the Bank at the time of grant of Options and the aggregate of all such Options granted to the Eligible Employees shall not exceed ten per cent of the aggregate of the number of issued equity shares of the Bank, from time to time, on the date(s) of grant of Option(s).

 

	
  

	
2.

	
The Options granted but not vested and the Options vested but not exercised in accordance with the Scheme or the Award Confirmation or the Vesting Confirmation shall terminate and the Shares covered by such terminated Options shall become available for future grant under the Scheme.

	
Section V:

	
Administration of the Scheme

	
  

	
1.

	
The Scheme shall be administered by the Committee.  A member of the Committee to whom the matter under the Scheme specifically relates shall not vote on such matter.

	
  

	
2.

	
Unless otherwise expressly provided in the Scheme or applicable law, all decisions, determinations and interpretations with respect to, connected with, arising out of or in relation to the Scheme or Award Confirmation or Vesting Confirmation shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon all Persons including the Bank, any Participants, shareholders and any employees.

	
  

	
3.

	
Unless otherwise expressly provided in the Scheme or applicable law, the Scheme shall also be applicable to employees and Directors of the Subsidiaries and Holding Company.

 

	
Section VI:

	
Powers of the Committee

	
  

	
1.

	
Subject to the provisions of the Scheme and applicable law and in addition to the other express powers and authorisations conferred by the Scheme, the Committee shall have full power and authority to :

 

 

	
  

	
a.

	
determine, from time to time, eligibility of employees to participate in the Scheme;

	
  

	
b.

	
determine the number of Shares subject to each Option;

	
  

	
c.

	
determine the minimum and maximum number of Options to be granted under the Scheme per Participant and in aggregate;

	
  

	
d.

	
prescribe the Vesting Period and Vesting Criteria;

 

  

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e.

	
prescribe the conditions under which the Options vested in the Participant may lapse (including in case of termination);

	
  

	
f.

	
prescribe the Exercise Period within which the Participant should exercise the vested Options in the event of termination or resignation of the Participant;

	
  

	
g.

	
prescribe whether the Options vested in a Participant are exercisable at one time or at various points of time within the Exercise Period;

	
  

	
h.

	
prescribe the conditions and procedure for the grant, vest and exercise of Options by Participants including Participants who are on long leave, training or otherwise indisposed;

	
  

	
i.

	
prescribe, if deemed appropriate and necessary, the procedure for cashless exercise of Options;

	
  

	
j.

	
establish, amend, suspend or waive such rules and regulations as it shall deem  appropriate for the proper administration of the Scheme;

	
  

	
k.

	
Interpret any matter with respect to, connected with, arising out of or in relation to the Scheme, the Award Confirmation and the Vesting Confirmation;

	
  

	
l.

	
Appoint such agents as it shall deem necessary for the proper administration of the Scheme;

	
  

	
m.

	
determines or impose other conditions to the grant or exercise of Options under the Scheme as it may deem appropriate;

	
  

	
n.

	
make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Scheme;

	
  

	
o.

	
frame suitable policies and systems to ensure that there is no violation of:

	
  

	
i.

	
Securities and Exchange Board of India (Insider Trading) Regulations, 1992; and

	
  

	
ii.

	
Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995;

     by any employee.

 

	
Section VII:

	
Eligibility for grant of Options

	
  

	
1.

	
The Committee shall have the sole authority to designate any Eligible Employee as Participant.

 

  

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2.

	
In determining the Eligible Employee to receive an Option as well as in determining the number of Options to be granted to a Participant, the Committee may consider the position and responsibilities of the Eligible Employee, the nature and value to the Bank of the Eligible Employee's services and accomplishments whether direct or indirect, length of service, grade, performance, merit, present and potential contribution and conduct of the Eligible Employee and such other factors as the Committee may deem relevant.

 

	
Section VIII:

	
Vesting of Option

	
  

	
1.

	
2The Options granted to the Participant may vest at one time or at various points of time as stipulated in the Award Confirmation.  Provided, however, there shall be a minimum period of one year between the grant of Options and vesting of Options. Unless earlier vested, expired, forfeited or otherwise terminated, each Option shall expire in its entirety by such period as stipulated in the Award Confirmation or the fourth anniversary of the date of grant of Option, whichever is earlier, or such further or other period as the Committee may determine.

	
  

	
2.

	
No Option or any part thereof shall vest :

	
  

	
a)

	
if the Participant does not fulfill Vesting Criteria as stipulated in the Award Confirmation; or

	
  

	
b)

	
if the Participant’s employment is terminated by the Bank for Cause; or

	
  

	
3c)

	
if the Participant voluntarily terminates employment with the Bank and the options to the extent not vested shall lapse/expire and be

 

2 The original Section VIII (1) was as under:

‘The Options granted to the Participant may vest at one time or at various points of time as stipulated in the Award Confirmation. Provided, however, there shall be a minimum period of one year between the grant of Options and vesting of Options. Unless earlier vested, expired, forfeited or otherwise terminated, each Option shall expire in its entirety upon the third anniversary of the date of grant of Option’.

 

The said Section was amended pursuant to the Resolution of the Board passed at its Meeting held on April 30, 2004 based on the recommendation of the Board Governance & Remuneration Committee (Meeting held on April 29, 2004) as under:

‘The Options granted to the Participant may vest at one time or at various points of time as stipulated in the Award Confirmation.  Provided, however, there shall be a minimum period of one year between the grant of Options and vesting of Options. Unless earlier vested, expired, forfeited or otherwise terminated, each Option shall expire in its entirety by such period as stipulated in the Award Confirmation or the fourth anniversary of the date of grant of Option, whichever is earlier, or such further or other period as the Committee may determine’.

3 The original Section VIII(2)(c) was as under:

 

  

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forfeited forthwith, provided that this provision shall not be applicable to the employees of ICICI Bank who have resigned or who may resign from time to time to join companies, approved by the Board Governance & Remuneration Committee of ICICI Bank, that have been established or promoted or set up (whether solely or jointly with any other entity) by erstwhile ICICI Limited or ICICI Bank or its subsidiaries.

 

	
  

	
3.

	
If the Participant’s employment terminates due to death or permanent disability, whole of the Options shall immediately vest in the Participant’s Successors, or the Participant, as the case maybe.

	
  

	
4.

	
If the Participant's employment terminates due to retirement (including pursuant to any early / voluntary retirement scheme), the whole of the Options shall vest, on the expiry of one year from the date of grant of Options, in the Participant.  Provided however that in the event of death or permanent disability of the Participant after retirement but before vesting of Options, the whole of the Options shall immediately vest in the Participant's Successors or the Participant as the case may be.

	
Section IX:

	
Exercise Price

The Exercise Price shall be determined by the Committee on the date the Option is granted and shall be reflected in the Award Confirmation.  The method of payment of Exercise Price shall be, determined by the Committee (including by any one or more of the following methods of payment).

	
  

	
a.

	
Cash

 

‘if the Participant voluntarily terminates employment with the Bank other than on account of death, retirement, or permanent disability, and the options to the extent not already vested shall lapse and stand terminated and expired forthwith’.

which was amended as under pursuant to the Resolution passed by the Compensation Committee of the Bank at its Meeting held on April 26, 2001.

‘if the Participant voluntarily terminates employment with the Bank and the options to the extent not vested shall lapse/expire and be forfeited forthwith, provided that this provision shall not be applicable to the official who have or may join ICICI Limited or any of its subsidiaries.’

Pursuant to the Resolution passed by the Board Governance and Remuneration Committee of the Bank at its Meeting held on January 28, 2004, the said Section was further amended as under with retrospective effect from May 3, 2002, being the date on and from which the Scheme of Amalgamation of ICICI Limited, ICICI Capital Services Limited and ICICI Personal Financial Services Limited with ICICI Bank Limited came into effect:

‘if the Participant voluntarily terminates employment with the Bank and the options to the extent not vested shall lapse/expire and be forfeited forthwith, provided that this provision shall not be applicable to the employees of ICICI Bank who have resigned or who may resign from time to time to join companies, approved by the Board Governance & Remuneration Committee of ICICI Bank, that have been established or promoted or set up (whether solely or jointly with any other entity) by erstwhile ICICI Limited or ICICI Bank or its subsidiaries.’

  

8

  

 

	
  

	
b.

	
Cheque

	
  

	
c.

	
Promissory Note

	
  

	
d.

	
Cash-less exercise programme

	
Section X:

	
Exercise of Options

	
  

	
1.

	
Subject to vesting and other restrictions provided for hereunder or otherwise imposed in accordance herewith, the Participant or Participant's Successors, as the case may be, may exercise the Options by the payment of Exercise Price in full at such time as may be notified during the Exercise Period.

	
  

	
2.

	
Unless earlier exercised, expired, forfeited or otherwise terminated, each vested Option, if not exercised during the Exercise Period shall lapse and stand terminated and expired forthwith.

	
  

	
3.

	
If the Participant’s employment is terminated by the Bank for the Cause the Participant’s vested Options, to the extent then unexercised, shall thereupon cease to be exercisable and shall lapse and stand terminated and expired forthwith.

	
  

	
4.

	
If the Participant voluntarily terminates employment with the Company other than on account of death, retirement, or permanent disability, the vested Options, to the extent then unexercised, shall be exercised by the payment of Exercise Price in full within a period of three months from the date of termination, which period shall be deemed to be the Exercise Period.

	
  

	
5.

	
If the Participant’s employment is terminated due to death, retirement (including pursuant to any early /voluntary retirement scheme) or permanent disability, the vested Option, shall be exercised by the payment of Exercise Price in full at such time as may be notified during the Exercise Period.

	
  

	
6.

	
Upon receipt of the notice for exercise of the Options (in the form prescribed) and the payment of Exercise Price in a form and manner as may be stipulated by the Committee, the Bank shall issue and allot Shares to the Participant.

	
Section XI:

	
General Terms And Conditions

	
  

	
1.

	
The Committee may at  any time amend, discontinue or terminate the Scheme or   any part or portion thereof at any time.  Provided that any such amendment, discontinuation or termination that would impair the rights of or is detrimental to the interests of the Participant shall not, to that extent, be effective without the consent of the affected Participant.

 

  

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2.

	
Participation in the Scheme shall not constitute or be construed as a guarantee by the Bank of return on the Shares of the Bank. Any loss/potential loss due to fluctuations in the market price of the Shares or on any other account whatsoever, and the risks associated with such investments will be that of the Participant alone and not of the Bank.

	
  

	
3.

	
This Scheme shall be subject to all applicable laws and such other terms and conditions, as may be stipulated by the Committee in its absolute discretion.

	
  

	
4.

	
In the event of issuance of bonus/rights shares, recapitalisation, stock split, reorganisation, merger, consolidation of the Bank or other similar events the number of Shares covered by each outstanding Option and the number of Shares, which have been authorised for issuance under the Scheme but as to which no Options have yet been granted  or which have been returned to the Scheme upon the termination of Options as well as the Exercise Price shall be increased or decreased such that the rights of the Participant is substantially proportionate to the rights existing prior to such event and to ensure that there is no dilution or enlargement of the benefits available under the Scheme.

	
  

	
5.

	
The Committee may at any time waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any Option theretofore granted, prospectively or retrospectively. Provided that any such waiver, amendment, alteration, suspension, discontinuation, cancellation or termination that would impair the rights of or is detrimental to the interests of the Participant shall not, to that extent be effective without the consent of the affected Participant.

	
  

	
6.

	
The employees shall maintain the utmost confidentiality regarding the contents of the Scheme and the benefits thereunder at all times and shall not make any announcement to the public or to any third Person regarding the arrangements contemplated by the Scheme and the benefits thereunder except to the extent as may be required by law.

	
  

	
7.

	
The Bank is entitled to and may, anytime at its discretion, finance the Participant in any manner to the extent permitted by law for the purpose of purchase of Shares or payment of any amount under the Scheme.

	
  

	
8.

	
The grant of an Option shall not be construed as giving a Participant the right to be retained in the employment of the Bank.  Neither the Scheme nor Award Confirmation nor Vesting Confirmation shall form part of any contract of employment between the Bank and the Participant.  The rights and obligations of the Participant under the terms of his office or employment with the Bank shall not be affected by his participation in the Scheme.  Nothing in the Scheme or any Award Confirmation or any Vesting Confirmation shall confer or be construed as affording a

 

  

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Participant any additional rights as to compensation or damages in consequences of the termination of such office or employment for any reason.

 

	
  

	
9.

	
No Participant or holder or beneficiary of any Option shall have any rights as a shareholder with respect to any Shares to be issued pursuant to the Scheme until he has become the holder of such Shares.

	
  

	
10.

	
The Shares issued pursuant to any Option shall rank pari passu with all the other equity shares of the Bank for the time being issued and outstanding, 4including payment of full dividend.

	
  

	
11.

	
Neither the Scheme nor the Option shall create or be construed to create a trust or a separate fund of any kind or a fiduciary relationship between the Bank and a Participant.  To the extent that any Person acquires a right to receive payments from the Bank pursuant to any Option, such right shall be no greater than the right of any unsecured general creditor of the Bank.

	
  

	
12.

	
No fractional shares shall be issued or delivered pursuant to the Option, and the Committee shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional shares or whether such fractional shares or any rights thereto shall be cancelled, terminated, or otherwise eliminated.

	
  

	
13.

	
No employee shall have any claim to be granted any Option, and there is no obligation on the part of the Bank for uniformity of treatment of employees or holders or beneficiaries of Options.  The terms and conditions of Options need not be the same with respect to each Participant.

	
  

	
14.

	
No option shall be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant, except to the extent provided under the Scheme or by will or the laws of inheritance.

	
  

	
15.

	
Nothing contained in the Scheme shall prevent the Bank from adopting or continuing the current or other compensation arrangements and such arrangements may be either generally applicable or applicable only in specific cases.

	
  

	
16.

	
In the event of any tax liability arising on account of grant of the Options to a Participant, the liability shall be that of the Participant alone and the Bank shall have the right to cause the Shares held by the Participant sold or otherwise alienated to meet the liability on behalf of the Participant.  The Bank may, in its discretion,

 

4 The Board of Directors of the Bank at its Meeting held on July 25, 2003, amended Section XI(10) as under:

After the words ‘issued and outstanding’ the following words ‘including payment of full dividend.’ were added.

 

  

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require the Participant  to pay to the Bank at the time of exercise of any Option the amount that the Bank deems necessary to satisfy the Bank's obligation to withhold income or other taxes incurred by reason of such exercise.

 

	
  

	
17.

	
The Participant shall do all acts necessary and execute all such deeds and documents as may be deemed necessary by the Committee to give effect to the terms of the Scheme.

	
Section XII:

	
Award Confirmation

The grant of Options hereunder shall be evidenced by an Award Confirmation which shall be delivered to the Participant and shall specify the number of Options granted and the terms and conditions of the grant of Options and rules applicable thereto.

	
Section XIII:

	
Vesting Confirmation

The vesting of Options hereunder, shall be evidenced by a Vesting Confirmation which shall be delivered to the Participant and shall specify the number of Options vested and the  terms and conditions of the vesting of Options and rules applicable thereto.

	
Section XIV:

	
Effective and Expiry Dates

This Scheme shall be effective as of the date of its approval by the shareholders of the Bank and expire on such date as may be notified by the Board of Directors of the Bank.

	
Section XV:

	
Headings

Headings are given to the Sections of the Scheme solely as a convenience to facilitate reference.  Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Scheme or any provision thereof.

************************

 

 

12Exhibit 4.4

                                   Approved by Shareholders:  May 21, 2010

Amendment Approved by Shareholders:  May 20, 2011

Amendment Approved by Shareholders:  May 17, 2013

AETNA INC.

2010 STOCK INCENTIVE PLAN

SECTION 1.     PURPOSE.

The purposes of this Plan are to promote the interests of the Company and its shareholders and align the interests of shareholders and Participants by:

(i) motivating Participants through Awards tied to total return to shareholders (i.e., stock price appreciation and dividends);

(ii) attracting and retaining high performing individuals as Participants;

(iii) enabling Participants to acquire additional equity interests in the Company; and

(iv) providing compensation opportunities dependent upon the Company’s performance relative to its competitors and changes in its own performance over time.

SECTION 2.     DEFINITIONS.

“AFFILIATE” shall mean any corporation or other entity (other than the Company or one of its Subsidiaries) in which the Company directly or indirectly owns at least twenty percent (20%) of the combined voting power of all classes of stock of such entity or at least twenty percent (20%) of the ownership interests in such entity.

“AWARD” shall mean a grant or award under the Plan, as evidenced in a written document delivered to a Participant as provided in Section 12(b).

“BOARD” shall mean the Board of Directors of the Company. 

“CAUSE” shall mean (i) the willful failure by the Participant to perform substantially the Participant’s duties as an employee of the Company (other than due to physical or mental illness) after reasonable notice to the Participant, (ii) the Participant’s engagement in serious misconduct that is injurious to the Company, any Subsidiary or any Affiliate, (iii) the Participant’s conviction of, or entrance of a plea of nolo contendere to, a crime that constitutes a felony, (iv) the breach by the Participant of any written covenant or agreement not to compete with the Company, any Subsidiary or any Affiliate or (v) the breach by the Participant of his or her duty of loyalty to the Company which shall include, without limitation, (A) any disclosure by the Participant of any confidential information pertaining to the Company, any Subsidiary or any Affiliate, (B) any harmful interference by the Participant in the business or operations of the Company, any Subsidiary or any Affiliate, (C) any attempt by the Participant directly or indirectly to induce any employee, insurance agent, insurance broker or broker-dealer of the Company, any Subsidiary or any Affiliate to be employed or perform services elsewhere, (D) any attempt by the Participant directly or indirectly to solicit the trade of any customer or supplier, or prospective customer or supplier, of the Company or (E) any breach or violation of the Company’s Code of Conduct.

“CODE” shall mean the Internal Revenue Code of 1986, as amended, and the regulations thereunder.

“COMMITTEE” shall mean a committee of the Board as may be designated by the Board to administer the Plan, which shall consist of at least three directors of the Company chosen by the Board each of whom has satisfied such criteria for independence as the Board may establish and such additional regulatory or listing requirements as the Board may determine to be applicable or appropriate.

“COMMON STOCK” shall mean the common shares, $.01 par value, of the Company.

“COMPANY” shall mean Aetna Inc., a Pennsylvania corporation. 

“ELIGIBLE EMPLOYEE” shall mean each employee of the Company, its Subsidiaries or its Affiliates, but shall not include directors who are not employees of such entities. Any individual the Company designates as, or otherwise determines to be, an independent contractor shall not be considered an Eligible Employee, and such designation or determination shall govern regardless of whether such individual is ultimately determined to be an employee pursuant to the Code or any other applicable law.

“EMPLOYMENT” shall mean, for purposes of determining whether a termination of employment has occurred under the Plan, continuous and regular salaried employment with the Company, a Subsidiary or an Affiliate, which shall include (unless the Committee shall otherwise determine) any period of paid time off, any approved leave of absence or any salary continuation or severance pay period and, at the 

 

 

  

  

  

 

 

discretion of the Committee, may include service with any former Subsidiary or Affiliate of the Company. For this purpose, regular salaried employment means scheduled employment of at least 20 hours per week.

“EXCHANGE ACT” shall mean the Securities Exchange Act of 1934, as amended from time to time.

“EXECUTIVE OFFICER” shall mean those persons who are officers of the Company within the meaning of Rule 16a-l(f) of the Exchange Act.

“FAIR MARKET VALUE” shall mean on any date, with respect to a share of Common Stock, the closing price of a share of Common Stock as reported by the Consolidated Tape of New York Stock Exchange Listed Shares on such date, or, if no shares were traded on such Exchange on such date, on the next date on which the Common Stock is traded on such Exchange.

“FUNDAMENTAL CORPORATE EVENT” shall mean any stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares, offering to purchase Common Stock at a price substantially below fair market value, or other similar event.

“INCENTIVE STOCK” shall mean an Award of Common Stock granted under Section 7 which may become vested and nonforfeitable upon the passage of time and/or the attainment, in whole or in part, of performance objectives determined by the Committee.

“INCENTIVE STOCK OPTION” shall mean an option which is intended to meet the requirements of Section 422 of the Code.

“INCENTIVE UNIT” shall mean an Award of a contractual right granted under Section 7 to receive Common Stock (or, at the discretion of the Committee, cash based on the Fair Market Value of the Common Stock) which may become vested and nonforfeitable upon either the passage of time and/or the attainment, in whole or in part, of performance objectives determined by the Committee.

“NONSTATUTORY STOCK OPTION” shall mean an Option which is not intended to be an Incentive Stock Option.

“OPTION” shall mean the right granted under Section 5 to purchase the number of shares of Common Stock specified by the Committee, at a price and for the term fixed by the Committee in accordance with the Plan and subject to any other limitations and restrictions as this Plan and the Committee shall impose, and shall include both Incentive Stock Options and Nonstatutory Stock Options.

“OTHER STOCK-BASED AWARD” shall mean any right granted under Section 8.

“PARTICIPANT” shall mean an Eligible Employee who is selected by the Committee to receive an Award under the Plan and any recipient of a Substitute Award.

“PLAN” shall mean the Aetna Inc. 2010 Stock Incentive Plan, described herein, and as may be amended from time to time.

“RESTRICTED PERIOD” shall mean the period during which a grant of Incentive Stock or Incentive Units is subject to forfeiture.

“SECTION 409A” shall mean Section 409A of the Code and the regulations issued thereunder, as may be amended from time to time.

“STOCK APPRECIATION RIGHT” or “SAR” shall mean a right granted under Section 6.

“SUBSIDIARY” shall mean any entity of which the Company possesses directly or indirectly fifty percent (50%) or more of the total combined voting power of all classes of stock of such entity.

“SUBSTITUTE AWARD” shall mean an Award granted in assumption of, or in substitution for, an outstanding award previously granted by a company acquired by the Company or with which the Company combines.

SECTION 3.     ADMINISTRATION.

The Plan shall be administered by the Committee. The Committee shall have the responsibility of construing and interpreting the Plan and of establishing and amending such rules and regulations as it deems necessary or desirable for the proper administration of the Plan. Any decision or action taken or to be taken by the Committee, arising out of or in connection with the construction, administration, interpretation and effect of the Plan and of its rules and regulations, shall, to the maximum extent permitted by applicable law, be within its absolute discretion (except as otherwise specifically provided herein) and shall be conclusive and binding upon all Participants and any person claiming under or through any Participant.

Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards, if any, to 

 

 

  

  

  

 

 

be granted to an Eligible Employee; (iii) determine the number of shares of Common Stock to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Common Stock, other securities, other Awards or other property, or canceled, forfeited, or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances, cash, Common Stock, other securities, other Awards, other property, and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (viii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (ix) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan (including authorizing another committee of the Board to designate Participants or make Awards under the Plan within limits prescribed by the Committee).

Except with respect to any action or adjustment taken in connection with a Fundamental Corporate Event, any amendment or action that would, directly or indirectly, reduce the exercise price of any outstanding option or SAR previously granted under the Plan, including through an exchange or cancellation of awards for cash or other awards, shall be subject to the approval of the Company’s shareholders.

SECTION 4.     SHARES AVAILABLE FOR AWARDS.

(a) Shares Available for Issuance.  The maximum number of shares of Common Stock in respect of which Awards may be made under the Plan shall be a total of 22,000,000 shares of Common Stock. Shares of Common Stock may be made available from the authorized but unissued shares of the Company or from shares held in the Company’s treasury and not reserved for some other purpose. In the event that any Award is paid solely in cash, no shares shall be deducted from the number of shares available for issuance by reason of such Award. Shares of Common Stock subject to Awards that are forfeited, terminated, canceled or settled without the delivery of Common Stock under the Plan will again be available for Awards under the Plan, as will shares of Common Stock tendered (either actually or by attestation) to the Company in satisfaction or partial satisfaction of the exercise price of any Award under the Plan, and shares withheld by the Company to pay applicable withholding in accordance with Section 12.

(b) Adjustment for Corporate Transactions.  In the event that the Committee shall determine that any Fundamental Corporate Event affects the Common Stock such that an adjustment is required to preserve, or to prevent enlargement of, the benefits or potential benefits made available under this Plan, then the Committee shall, in such manner as the Committee may deem equitable, adjust any or all of (i) the number and kind of shares which thereafter may be awarded or optioned and sold or made the subject of Awards under the Plan, 

(ii) the number and kinds of shares subject to outstanding Awards and (iii) the grant, exercise or conversion price with respect to any of the foregoing. Additionally, the Committee may make provisions for a cash payment to a Participant or a person who has an outstanding Award; provided, however, that to the extent such an Award constitutes “deferred compensation” within the meaning of Section 409A, no such provision for a cash payment shall change the timing of payment of such Award unless such change is permitted under Section 409A. However, the number of shares subject to any Award shall always be a whole number.

SECTION 5.     STOCK OPTIONS.

(a) Grant.  Subject to the provisions of the Plan, the Committee shall have the authority to grant Options to an Eligible Employee and to determine (i) the number of shares to be covered by each Option, (ii) subject to Section 5(b), the exercise price of the Option and (iii) the conditions and limitations applicable to the exercise of the Option. Notwithstanding the foregoing, in no event shall the Committee grant any Participant Options (i) for more than 2,000,000 shares of Common Stock in respect of any year in which the Plan is in effect, as such number may be adjusted pursuant to Section 4(b) or (ii) with a term of exceeding 10 years. In the case of Incentive Stock Options, the terms and conditions of such grants shall be subject to and comply with Section 422 of the Code and the regulations thereunder.

(b) Exercise Price.  Except in the case of a Substitute Award, the exercise price of an Option shall not be less than 100% of the Fair Market Value on the date of grant.

(c) Exercise.  Each Option shall be exercised at such times and subject to such terms and conditions as the Committee may specify at the time of the applicable Award or thereafter. No shares shall be delivered pursuant to any exercise of an Option unless arrangements satisfactory to the Committee have been made to assure full payment of the exercise price therefor. Without limiting the generality of the foregoing, payment of the exercise price may be made in cash or its equivalent or, if and to the extent permitted by the Committee, by exchanging shares of Common Stock owned by the optionee (which are not the subject of any pledge or other security interest or which, in the case of Incentive Stock, are fully vested) either actually or by attestation, or by a combination of the foregoing, provided that the combined value of all cash and cash equivalents and the Fair Market Value of any such Common Stock so tendered to the Company, valued as of the date of such tender, is at least equal to such exercise price.

(d) Incentive Stock Option Annual Limit.  The aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by an Eligible Employee during any calendar year (counting Incentive Stock Options under this Plan and under any other stock option plan of the Company or a subsidiary) shall 

 

 

  

  

  

 

 

not exceed $100,000. If an Option intended to be an Incentive Stock Option is granted to an Eligible Employee and the Option may not be treated in whole or in part as an Incentive Stock Option pursuant to the $100,000 limitation, the Option shall be treated as an Incentive Stock Option to the extent it may be so treated under the limitation and as a Nonstatutory Stock Option as to the remainder. For purposes of determining whether an Incentive Stock Option would cause the limitation to be exceeded, Incentive Stock Options shall be taken into account in the order granted. The annual limit set forth above shall not apply to Nonstatutory Stock Options.

SECTION 6.     STOCK APPRECIATION RIGHTS.

(a) Grant of Stock Appreciation Rights.  The Committee shall have the authority to grant Stock Appreciation Rights in tandem with an Option, in addition to an Option, or freestanding and unrelated to an Option. Notwithstanding the foregoing, in no event shall the Committee grant any Participant Stock Appreciation Rights (i) for more than 2,000,000 shares of Common Stock in respect of any year in which the Plan is in effect, as such number may be adjusted pursuant to Section 4(b), and (ii) with a term exceeding 10 years (or the term of the underlying Incentive Stock Option in the case of a Stock Appreciation Right granted in tandem with an Incentive Stock Option). Stock Appreciation Rights granted in tandem with an Option may be granted either at the same time as the Option or at a later time.

(b) Exercise Price.  The exercise price of a Stock Appreciation Right shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date the Stock Appreciation Right was granted; provided that if a Stock Appreciation Right is granted retroactively in tandem with or in substitution for an Option, the exercise price may be the exercise price of the Option to which it is related.

(c) Exercise of Stock Appreciation Rights.  A Stock Appreciation Right shall entitle the Participant to receive from the Company an amount equal to the excess of the Fair Market Value of a share of Common Stock on the date of exercise of the Stock Appreciation Right over the base price thereof. The Committee shall determine the time or times at which or the event or events (including, without limitation, a change of control) upon which a Stock Appreciation Right may be exercised in whole or in part, the method of exercise and whether such Stock Appreciation Right shall be settled in cash, shares of Common Stock or a combination of cash and shares of Common Stock; provided, however, that unless otherwise specified by the Committee at or after grant, a Stock Appreciation Right granted in tandem with an Option shall be exercisable at the same time or times as the related Option is exercisable.

SECTION 7.     INCENTIVE AWARDS.

(a) Incentive Stock and Incentive Units.  Subject to the provisions of the Plan, the Committee shall have the authority to grant time vesting and/or performance vesting Incentive Stock or Incentive Units to any Eligible Employee and to determine (i) the number of shares of Incentive Stock and/or the number of Incentive Units to be granted to each Participant and (ii) the other terms and conditions of such Awards; provided that, to the extent necessary to comply with applicable law, Incentive Stock shall only be awarded to an Eligible Employee who has been employed for such minimum period of time as shall be determined by the Committee. The Restricted Period related to Incentive Stock or Incentive Units shall lapse upon the passage of time and/or the determination by the Committee that the performance objectives established by the Committee have been attained, in whole or in part. The maximum number of shares of Common Stock that may be subject to any performance-based Awards of Incentive Stock and/or Incentive Units (whether payable in cash or shares) granted to an Executive Officer with respect to any year in which the Plan is in effect shall not exceed 2,000,000 shares, as such number may be adjusted pursuant to Section 4(b). If the award is intended to qualify under Section 162(m) of the Code, the performance objectives with respect to an Award made to an Executive Officer shall be related to at least one of the following criteria, which may be determined solely by reference to the performance of the Company, a Subsidiary or an Affiliate (or any business unit thereof) or based on comparative performance relative to other companies: (i) net income; (ii) earnings before income taxes; (iii) earnings per share; (iv) return on shareholders equity; (v) expense management; (vi) profitability of an identifiable business unit or product; (vii) ratio of claims to revenues; (viii) revenue growth; (ix) earnings growth; (x) total shareholder return; (xi) cash flow; (xii) return on assets; (xiii) pretax operating income; (xiv) net economic profit (operating earnings minus a charge for capital); (xv) customer satisfaction; (xvi) provider satisfaction; (xvii) employee satisfaction; (xviii) quality of networks; (xix) strategic innovation or (xx) any combination of the foregoing.

SECTION 8.     OTHER STOCK-BASED AWARDS.

The Committee shall have authority to grant to eligible Employees an “Other Stock-Based Award”, which shall consist of any right which is (i) not an Award described in Sections 5 through 7 above and (ii) an Award of Common Stock or an Award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Common Stock (including, without limitation, securities convertible into Common Stock), as deemed by the Committee to be consistent with the purposes of the Plan; provided that any such rights must comply, to the extent deemed desirable by the Committee, with Rule 16b-3 under the Exchange Act and applicable law. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the terms and conditions of any such Other Stock-Based Award.

SECTION 9.     DIVIDENDS AND DIVIDEND EQUIVALENTS.

The Committee may provide that any Award shall include dividends or dividend equivalents, payable in cash, Common Stock, securities or other property on a current or deferred basis, including payment contingencies provided, however, in no event shall any such dividend or dividend equivalent become payable prior to the date on which an award is vested in accordance with its terms.

 

 

  

  

  

 

SECTION 10.     STOCK IN LIEU OF CASH.

The Committee may grant Awards in lieu of all or a portion of compensation or an Award otherwise payable in cash to an Executive Officer pursuant to any bonus or incentive compensation plan of the Company.

SECTION 11.     DEFERRAL.

The Committee shall have the discretion to determine whether, to what extent, and under what circumstances cash, shares of Common Stock, other securities, other Awards, other property, and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the Participant or of the Committee. The timing of any elective deferral shall comply with Section 409A. At the time of any automatic or elective deferral, the time and form of payment shall be established consistent with the requirements of Section 409A. If the time or form of payment is not so established, the form of payment shall be a lump sum and the time of payment shall be the date the Participant experiences a “separation from service” within the meaning of Section 409A. Gains from the exercise of Options and Stock Appreciation Rights shall not be eligible for automatic or elective deferral.

SECTION 12.     GENERAL PROVISIONS.

(a) Withholding.  The Company shall have the right to deduct from all amounts paid to a Participant in cash (whether under this Plan or otherwise) any taxes required by law to be withheld in respect of Awards under this Plan. In the case of any Award satisfied in the form of Common Stock, no shares shall be issued unless and until arrangements satisfactory to the Company shall have been made to satisfy any withholding tax obligations applicable with respect to such Award.

(b) Award Agreement.  Each Award hereunder shall be evidenced in writing. The written agreement shall be delivered to the Participant and shall incorporate the terms of the Plan by reference and specify the terms and conditions thereof and any rules applicable thereto.

(c) Nontransferability.  Unless the Committee shall permit (on such terms and conditions as it shall establish) an Award to be transferred to a member of the Participant’s immediate family or to a trust or similar vehicle for the benefit of such immediate family members (collectively, the “Permitted Transferees”), no Award shall be assignable or transferable except by will or the laws of descent and distribution, and except to the extent required by law, no right or interest of any Participant shall be subject to any lien, obligation or liability of the Participant. All rights with respect to Awards granted to a Participant under the Plan shall be exercisable during the Participant’s lifetime only by such Participant or, if applicable, the Permitted Transferees or the Participant’s legal representative.

(d) No Right to Employment.  The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company, any Subsidiary or any Affiliate. Further, the Company and each Subsidiary and Affiliate expressly reserves the right at any time to dismiss a Participant free from any liability, or any claim under the Plan, except as provided herein or in any Award Agreement.

(e) No Rights to Awards, No Shareholder Rights.  No Participant or Eligible Employee shall have any claim to be granted any Award under the Plan, and there is no obligation of uniformity of treatment of Participants and Eligible Employees. Subject to the provisions of the Plan and the applicable Award, no person shall have any rights as a shareholder with respect to any shares of Common Stock to be issued under the Plan prior to the issuance thereof.

(f) Applicable Law.  The validity, construction, interpretation, administration and effect of the Plan and of its rules and regulations, and rights relating to the Plan, shall be determined solely in accordance with the laws of the State of Connecticut.

(g) Effective Date.  The Plan shall be effective upon approval by the Company’s shareholders.

(h) Amendment or Termination of Plan.  The Board or the Committee may terminate or suspend the Plan at any time, but the termination or suspension will not adversely affect any vested Awards then outstanding under the Plan. No Award may be granted under the Plan after May 21, 2020 or such earlier date as the Plan is terminated by action of the Board or the Committee. The Plan may be amended or terminated at any time by the Board, except that no amendment may be made without shareholder approval if the Committee determines that such approval is necessary to comply with any tax or regulatory requirement, including any approval requirement which is a prerequisite for exemptive relief from Section 16 of the Exchange Act, for which or with which the Committee determines that it is desirable to qualify or comply; and, the Committee may amend the term of any Award or Option granted, retroactively or prospectively, but no amendment may adversely affect any vested Award or Option without the holder’s consent.

(i) Compliance with Legal and Exchange Requirements.  The Plan, the granting and exercising of Awards thereunder, and the other obligations of the Company under the Plan, shall be subject to all applicable federal and state laws, rules, and regulations, and to such approvals by any regulatory or governmental agency as may be required. The Company, in its discretion, may postpone the granting and exercising of Awards, the issuance or delivery of Common Stock under any Award or any other action permitted under the Plan to permit the Company, with reasonable diligence, to complete such stock exchange listing or registration or qualification of such Common Stock or other required action under any federal or state law, rule, or regulation and may require any Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of Common Stock in compliance with applicable laws, rules, and regulations. The Company shall not be obligated by virtue of any provision of the Plan to recognize the exercise of any Award or to otherwise sell or issue Common Stock in violation of any such laws, rules, or regulations; and any postponement of the exercise or 

 

 

 

  

  

  

 

settlement of any Award under this provision shall not extend the term of such Awards, and neither the Company nor its directors or officers shall have any obligations or liability to the Participant with respect to any Award (or stock issuable thereunder) that shall lapse because of such postponement.

(j) Severability of Provisions.  If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and this Plan shall be construed and enforced as if such provision had not been included.

(k) Incapacity.  Any benefit payable to or for the benefit of a minor, an incompetent person or other person incapable of providing a receipt therefore shall be deemed paid when paid to such person’s guardian or to the party providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge any liability or obligation of the Committee, the Board, the Company and all other parties with respect thereto.

(1) Headings and Captions. The headings and captions herein are provided for reference and convenience only, shall not be considered part of this Plan, and shall not be employed in the construction of this Plan.

(m) Compliance with Section 409A.  All Awards granted under the Plan are intended to be either exempt from the requirements of Section 409A or, if not exempt, to satisfy the requirements of Section 409A. The provisions of the Plan and any Awards granted under the Plan shall be construed in a manner consistent with such intent. In addition, notwithstanding any other provision of this Plan or an Award agreement to the contrary, the Company will not pay or accelerate the payment of any amount that constitutes “deferred compensation” within the meaning of Section 409A, in violation of Section 409A. To the extent any amount of “deferred compensation” as defined in Section 409A would otherwise vest and become payable upon a Change in Control or upon a disability, as set forth herein or in an Award Agreement, any such Award may vest but payment shall not be accelerated unless the Change in Control or the disability also satisfies the definition of “change in control” or “disability” as set forth in Section 409A.

Any amount that constitutes “deferred compensation” within the meaning of Section 409A and is payable under the Plan solely by reason of a Participant’s termination of employment shall be payable only if the Participant has experienced a “separation from service” within the meaning of Section 409A, provided that if the Participant is a “specified employee” within the meaning of Section 409A at the time of such separation from service, as determined by the Company in accordance with Section 409A, no payments shall be made before the six-month anniversary of the Participant’s separation from service, at which time all payments that would otherwise have been made during such six-month period shall be paid to the Participant in a lump sum.

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