Document:

EX-10.4

 

Exhibit 10.4

AETNA INC.

NON-EMPLOYEE DIRECTOR COMPENSATION PLAN

RESTRICTED STOCK UNIT AGREEMENT

Pursuant to its Non-Employee Director Compensation Plan (the “Plan”), Aetna Inc. (the
“Company”) hereby grants to the person named below the stated number of Restricted Stock Units on
the terms and conditions hereinafter set forth. All capitalized terms used herein which are not
otherwise defined herein shall have the meaning specified in the Plan.

	 	 	 	 	 
	Effective Date	 	Grantee	 	Number of Shares of Restricted Stock Units
	 
	 	 	 	 

	 	 	 	 	 
	Installment	 	Shares	 	Vesting Date
	1
	 	 	 	 
	2
	 	 	 	 
	3
	 	 	 	 

ARTICLE I

DEFINITIONS

	(a)	 	“Change in Control” means the happening of any of the following:

	 	(i)	 	When any “person” as defined in Section 3(a)(9) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) and as used in Sections 13(d) and 14(d)
thereof, including a “group” as defined in Section 13(d) of the Exchange Act but
excluding the Company and any Subsidiary thereof and any employee benefit plan
sponsored or maintained by the Company or any Subsidiary (including any trustee of such
plan acting as trustee), directly or indirectly, becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act, as amended from time to time), of
securities of the Company representing 20 percent or more of the combined voting power
of the Company’s then outstanding securities;

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	 	(ii)	 	When, during any period of 24 consecutive months, the individuals who, at the
beginning of such period, constitute the Board (the “Incumbent Directors”) cease for
any reason other than death to constitute at least a majority thereof,
provided that a director who was not a director at the beginning of
such 24-month period shall be deemed to have satisfied such 24-month requirement (and
be an Incumbent Director) if such director was elected by, or on the recommendation
of or with the approval of, at least two-thirds of the directors who then qualified
as Incumbent Directors either actually (because they were directors at the beginning
of such 24-month period) or by prior operation of this paragraph (ii); or
	 
	 	(iii)	 	The occurrence of a transaction requiring stockholder approval for the
acquisition of the Company by an entity other than the Company or a Subsidiary through
purchase of assets, or by merger, or otherwise.
	 
	 	 	 	Notwithstanding the foregoing, in no event shall a “Change in Control” be deemed to
have occurred (i) as a result of the formation of a Holding Company, or (ii) with
respect to Grantee, if Grantee is part of a “group,” within the meaning of Section
13(d)(3) of the Exchange Act as in effect on the effective date, which consummates
the Change in Control transaction. In addition, for purposes of the definition of
“Change in Control” a person engaged in business as an underwriter of securities
shall not be deemed to be the “Beneficial Owner” of, or to “beneficially own,” any
securities acquired through such person’s participation in good faith in a firm
commitment underwriting until the expiration of forty days after the date of such
acquisition.

	(b)	 	“Common Stock” means shares of the Company’s Common Shares, $.01 par value per share.
	 
	(c)	 	“Effective Date” means the date of grant of this award of Restricted Stock Units as set forth
above.
	 
	(d)	 	“Fair Market Value” means the closing price of the Common Stock as reported by the
Consolidated Tape of the New York Stock Exchange Listed Shares on the date such value is to be
determined, or, if no shares were traded on such date, on the next preceding day on which the
Common Stock was traded.
	 
	(e)	 	“Grantee” means the person named above to whom this award of Restricted Stock has been
granted.
	 
	(f)	 	“Government Service” shall mean the appointment or election of a Director to a position with
the Federal, state or local government or any political subdivision, agency or instrumentality
thereof.
	 
	(g)	 	“Holding Company” means an entity that becomes a holding company for the Company or its
businesses as a part of any reorganization, merger, consolidation or other transaction,
provided that the outstanding shares of common stock of such entity and the combined voting
power of the then outstanding voting securities of such entity entitled to vote generally in
the election of directors is, immediately after such reorganization, merger, consolidation or
other transaction, beneficially owned, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners, respectively, of the voting stock
outstanding immediately prior to such reorganization, merger, consolidation or other
transaction in substantially the same proportions as their ownership, immediately prior to
such reorganization, merger, consolidation or other transaction, of such outstanding voting
stock.
	 
	(h)	 	“Installment” means a portion of this award of Restricted Stock Units as set forth above.
	 
	(i)	 	“Interest Account” means a bookkeeping account established to record a deferral of Restricted
Stock Units.
	 
	(j)	 	“Restricted Period” means the period during which this award of Restricted Stock Units is not
vested.
	 
	(k)	 	“Retirement” shall mean termination of service as a Director on account of the Company’s
mandatory Director Retirement policy as may be in effect on the date of such termination of
service.
	 
	(l)	 	“Shares of Stock” or “Stock” means the Company’s Common shares, .01 par value per share.

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	(m)	 	“Stock Unit Account” — a bookkeeping account established to record a deferral of restricted
stock units.
	 
	(n)	 	“Successor” means the legal representative of the estate of a deceased Grantee or the person
or persons who shall acquire the right to the Restricted Stock by bequest or inheritance or by
reason of the death of the Grantee.
	 
	(o)	 	“Subsidiary” means an entity of which, at the time such subsidiary status is to be
determined, at least 50% of the total combined voting power of all classes of stock of such
entity is held by the Company and/or one or more other subsidiaries.
	 
	(p)	 	“Vesting Date” means the date any Installment shall vest in accordance with the terms of this
Agreement.

ARTICLE II

RESTRICTED PERIOD

	(a)	 	These Restricted Stock Units will vest in Installments on or after the dates set forth
above or on such earlier date as provided in Article IV or V.
	 
	(b)	 	Once vested, each Installment of such Restricted Stock Units shall be payable in Common
Stock. Grantee may elect to defer the payment of any Restricted Stock Unit provided the
Grantee makes such election pursuant to procedures established by the Company from time to
time. During the period of deferral, such obligation shall represent an unfunded contractual
obligation of the Company to deliver Common Stock. During the period of deferral, the
deferred amount will be invested in a Stock Unit Account which tracks the value of the Common
Stock. Dividend equivalents shall be credited during the period of deferral or an Interest
Account. The Interest Account will credit interest at the same rate and in the manner in
which interest is credited under the fixed investment fund under the Company’s 401(k) plan (or
any successor thereto).

ARTICLE III

CAPITAL CHANGES

In the event that the Board 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 Board shall, in such manner
as the Board may deem equitable, adjust the number and kind of units subject to the award of
Restricted Stock Units. Additionally, the Board may make provision for any cash payment to a
Grantee or the Successor of the Grantee. However, the number of Restricted Stock Units shall
always be a whole number.

ARTICLE IV

CHANGE IN CONTROL

Upon the occurrence of a Change in Control, each Restricted Stock Unit shall become
immediately vested.

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ARTICLE V

VESTING AND TERMINATION OF RESTRICTED STOCK UNIT

If Grantee shall cease board service for reason of death, disability or Government Service,
any unvested Restricted Stock units will vest and be paid to Grantee as of the date of cessation of
board service. If Grantee shall cease board service for reason of Retirement, unvested Restricted
Stock Units shall vest immediately and be paid on the vesting dates set forth above. If any
installment of this Restricted Stock Unit is not yet vested on or before the Grantee’s termination
of board service, such unvested Installment shall be forfeited.

ARTICLE VI

OTHER TERMS

	(a)	 	Grantee shall not have any rights as a stockholder by virtue of this grant of Restricted
Stock Units.
	 
	(b)	 	During the Restricted Period, the Restricted Stock Units shall be nontransferable and
nonassignable except by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order.
	 
	(c)	 	This Agreement is subject to the Non-Employee Director Compensation Plan heretofore adopted
by the Company and approved by its shareholders. The terms and provisions of the Plan or a
successor plan (including any subsequent amendments thereto) are hereby incorporated herein by
reference. In the event of a conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and provisions of the Plan will govern and
prevail.

               IN WITNESS WHEREOF, AETNA INC. has caused this Restricted Stock Agreement to be executed on
the Effective Date, and Grantee has accepted the terms and provisions hereof.

	 	 	 	 	 
	 	AETNA INC.

 	 
	 	By:  	 	 
	 	 	Its Chairman 	 
	 	 	 	 

4EX-10.5

 

	 	 	 	 	 

Exhibit 10.5

CONSULTING AGREEMENT

     This Consulting Agreement (this “Agreement”) is made as of the 1st day of
October, 2006, by and between Aetna Inc. (“Company”) and John W. Rowe, M.D. (“Consultant”). The
parties hereto agree as follows:

     1. Engagement. Company hereby engages Consultant and Consultant hereby agrees to
render at the request of the Company’s Chief Executive Officer or Board of Directors, upon
reasonable notice, independent consulting services for Company on matters of an executive and/or
high level nature, including but not limited to design and analysis of Company’s experience with
various products and strategies including consumer-directed health plans, Aexcel networks, Chairman
initiatives, Medicare, pharmaceutical programs, wellness programs, and other business matters as
agreed by the parties. At the Company’s request, Consultant will collaborate with the Company on
presentation and publication of the results of these analyses for use by the Company, internally or
externally. In addition, at the Company’s request, Consultant shall serve as a director of the
Aetna Foundation, Inc. and continue to participate in specific community activities, including
Board-related service, as requested by Company and agreed to by Consultant. In this engagement and
all activities hereunder, Consultant shall serve as an independent contractor and not an employee
of Company, as further explained in Section 6 below.

     2. Term. The term of this Agreement shall begin as of October 1, 2006 and shall
terminate on September 30, 2009, unless terminated earlier or extended pursuant to Section 5 of
this Agreement.

     3. Compensation. As compensation for all services rendered by Consultant under this
Agreement, Company shall pay Consultant at a per diem rate of $4,000 per day and at $2,000 per
half-day for consulting services excluding any community-related efforts or service as a board
director of a charitable or not-for-profit entity, subject to the provisions of Section 5 of this
Agreement. All such compensation shall be payable without deduction, including no deduction for
federal income, social security, or state income taxes. All applicable taxes shall be the
responsibility of Consultant. Company also shall pay all travel-related expenses of Consultant for
such consulting services including all community-related efforts performed at Company’s and/or
Aetna Foundation Inc.’s request. In connection with any consulting assignment hereunder, (i)
Consultant shall have full access (on the same basis then applicable to senior executives of the
Company) to the Company’s travel facilities (e.g., car, driver, aircraft and helicopter services),
(ii) Company shall provide an office with appropriate support services for Consultant at Company’s
facilities in either New York or Boston (at Consultant’s election), unless Consultant assumes
another professional position that provides office and support services, provided, however, that if
Company does not maintain facilities in the city in which Consultant desires to work, it shall
provide Consultant facilities at another location in such city, and (iii) Company shall provide
Consultant with computers (including upgrades), software, printers, monitors and access to
information technology and communications support staff (on the same basis as such items and
support are made available to senior executives of the Company) in his office and at his two
principal residences.

     4. Performance of Duties. Consultant shall render services conscientiously and shall
devote his best efforts and abilities thereto, at such times during the term hereof, and in such
manner, as Company and Consultant shall mutually agree, not to exceed 25 full days per calendar
quarter, it being acknowledged that Consultant’s services shall be performed at such places and at
such times as are reasonably convenient to Consultant, upon reasonable notice. Consultant shall
observe all policies and directives promulgated from time to time by Company.

     5. Termination. This Agreement will terminate by either party upon reasonable notice
to the other. This Agreement also will terminate on Consultant’s death or, upon Consultant’s
acceptance of an academic or government position, upon Consultant’s request. The term of this
Agreement may be extended for two additional one-year periods on the same terms and conditions upon
mutual agreement of Consultant and Company. Consultant’s obligations under Section 7 (Confidential
Information), Section 8 (Return of Confidential Information and Other Company Property), Section 9
(Rights of Authorship), Section 10 (Remedy), Section 11 (Arbitration) and Section 12
(Miscellaneous) shall survive termination hereof.

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     6. Independent Contractor. It is expressly agreed that Consultant is acting as an
independent contractor in performing services hereunder. Company shall carry no workers’
compensation insurance or any health or accident insurance (other than standard Aetna retiree
medical care benefits to which the Consultant is otherwise entitled) to cover Consultant. Company
shall not pay any contributions to Social Security, unemployment insurance, federal or state
withholding taxes, nor provide any other contributions or benefits that might be expected in an
employer-employee relationship. Company shall, however, pay all expenses associated with the
arrangement contemplated herein, including but not limited to advice, consulting, negotiation and
preparation of documents memorializing such arrangement.

     7. Confidential Information. Consultant desires to act as a consultant to Company
and he understands and agrees that his duties for the Company in the past have required, and his
consulting duties may require, access to Confidential Information of a competitive nature, which
Company makes available only to select persons who have a need to know such confidential
information, and/or information subject to the attorney-client and work product privileges.
Consultant understands and agrees that for purposes of this Agreement, “Confidential Information”
includes all trade secrets and all information furnished by Company to Consultant, or to which
Consultant gains access during the course of his or her consulting relationship with Company, which
is either non-public, confidential or proprietary in nature, including, but not limited to
financial statements, client lists or information, supplier lists or information, subcontractor
lists or information, prospect lists or information, information pertaining to Company’s channels
of distribution, marketing, work product, pricing policy and records, sales representative
commission policy, sales volume by products, customer or geographic area, personnel history,
accounting procedures, invoice forms, contracts, leases, business plan, information about the
structure and marketing of the Company’s products and policies, revenue and/or commission
information, commission percentages, rating discounts and/or client costs, products, inventions,
services, pricing, databases, lead generation sources, debt information, employment manuals,
employee benefit cards, employee benefit statements, computer systems, software, computer hardware,
computer codes, passwords, programs and formula, technology, designs, secret processes, proprietary
or technical information, procedures or manuals, trademarks or copyrighted material in use or under
consideration for use, together with analyses, proposals, compilations, forecasts, studies, or
other documents or work product prepared by Company, its agents, representatives (including
attorneys, accountants and financial advisors) or employees which contain or otherwise reflect such
information. Consultant will not retain, use or disclose, directly or indirectly, any of Company’s
Confidential Information. Consultant recognizes that this Confidential Information is a unique
asset of Company, developed and perfected over a considerable time and at substantial expense to
Company and the disclosure of which may cause injury, loss of profits and loss of goodwill to
Company. Consultant agrees to protect the confidentiality of all Confidential Information during
the term of this Agreement and thereafter. Consultant agrees to keep all documents containing or
referring to Confidential Information in secure locations and not to duplicate, use or reveal to
third parties any Confidential Information except as necessary for the business purposes of
Company. Consultant agrees to inform all other persons to whom the Confidential Information might
be disclosed or made available of Company’s proprietary interest and of the recipient’s obligations
under this Agreement and to take such other protective measures as may be or become reasonably
necessary to preserve the confidentiality of such Confidential Information. Notwithstanding the
foregoing, however, “Confidential Information” shall not include such information that the
Consultant is required by law or a governmental agency to disclose, or information that has come
into the public domain by means other than breach of this Agreement.

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     8. Return of Confidential Information and Other Company Property. Consultant
acknowledges that all papers, photographs and apparatus related to the business of Company,
including those prepared or made by Consultant, including but not limited to the Confidential
Information, shall be and remain at all times the property of Company. When the consulting
relationship with the Company terminates for any reason, or upon request by Company, Consultant
will promptly deliver (within five calendar days) to Company all of Consultant’s files and copies
thereof and other property of Company in the Consultant’s possession, including but not limited to
any security pass or ID card, pagers, voice mail passwords or passcodes, company credit card, keys,
computer disks and software, work product, brochures or customer data, all originals and copies of
the Confidential Information and all originals and copies of documents relating to the Confidential
Information.

     9. Rights of Authorship. Consultant acknowledges that all original works of
authorship that are made by him (solely or jointly with others) within the scope of this Agreement
and which are protectable by copyright are “works made for hire” as that term is defined in the
United States Copyright Act (17 U.S.C., Section 101).

     10. Remedy. Consultant understands that Company would not have any adequate remedy at
law for the material breach or threatened breach by the Consultant of Sections 7 (Confidential
Information), 8 (Return of Confidential Information and Other Company Property) or 9 (Rights of
Authorship) of this Agreement, and agrees that in the event of any such material breach or
threatened breach, Company may, in addition to the other remedies which may be available to it,
file a suit in equity to enjoin Consultant from the breach or threatened breach of such
covenant(s).

     11. Arbitration. Any matter, controversy or claim arising out of or relating to this
Agreement or to any breach of this Agreement, except claims set forth in Section 10 of this
Agreement, as to which Company has elected to seek a court remedy, shall be settled by arbitration
before one arbitrator in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgments on the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof. Each party shall pay: the fees of his or its attorneys;
the expenses of his or its witnesses; and all other expenses connected with presenting his or its
case. Other costs of the arbitration, including the cost of any record or transcripts of the
arbitration hearing, administrative fees, the fees of the arbitrator, and all other fees and costs
shall be borne equally by the parties.

     12. Miscellaneous.

          (a) Notices. Any notice required or permitted to be given under this Agreement shall
be sufficient if in writing and if sent by registered or certified mail to Company or Consultant at
the address set forth below to such other address as they shall notify each other in writing.

If to Company:

Chief Executive Officer

Aetna Inc.

151 Farmington Avenue

Hartford, CT 06156

With a copy to:

General Counsel

Aetna Inc.

151 Farmington Avenue

Hartford, CT 06156

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          If to Consultant: at Consultant’s last known address as reflected on the books and records of
the Company

With a copy to:

Pearl Meyer & Partners

445 Park Avenue

New York, NY 10022

          (b) Assignment. This Agreement shall be binding upon and inure to the benefit of
Company and its successors and assigns. This Agreement shall not be assignable by Consultant.

          (c) Applicable Law. This Agreement shall be construed in accordance with the laws of
the State of Connecticut in every respect, without regard to its rules regarding conflicts of law.

          (d) Headings. Section headings and numbers herein are included for convenience of
reference only and this Agreement is not to be construed with reference thereto. If there is any
conflict between such numbers and headings and the text hereof, the text shall control.

          (e) Severability. If for any reason any portion of this Agreement shall be held
invalid or unenforceable, the parties agree that it is their intent that such provision shall be
enforced to the maximum extent possible under applicable law, and that the court or arbitrator
shall reform such provision to make it enforceable in accordance with the intent of the parties,
and that notwithstanding such invalidity, unenforceability or reformation of any provision, the
remaining provisions of this Agreement shall remain in full force and effect.

          (f) Entire Agreement. This Agreement contains the entire agreement of the parties
with respect to the subject matter hereof and supersedes all previous agreements between the
parties, provided, however, that the parties acknowledge that certain provisions of the Employment
Agreement dated as of September 6, 2000, as amended, may remain in effect as provided in such
agreement and amendments thereto, during all or a portion of the term of this Agreement. No
officer, employee, or representative of Company has any authority to make any representation or
promise in connection with this Agreement or the subject matter hereof that is not contained
herein, and Consultant represents and warrants that he has not executed this Agreement in reliance
upon any such representation or promise. No modification, extension or renewal of this Agreement
shall be valid unless made in writing and signed by the parties hereto.

          (g) Waiver of Breach. The waiver by Company of a breach of any provision of this
Agreement by Consultant shall not operate or be construed as a waiver of any subsequent breach by
Consultant.

     (h) Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute one agreement.

	 	 	 	 	 
	 	AETNA INC.

 	 
	 	By:  	 	 
	 	 	Its Chairman 	 
	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 
	Aetna Inc.	 	 	 	John W. Rowe, M.D.	 	 
	 
	 	 	 	 	 	 	 	 
	By: 

Its:

	 	/s/: Elease E. Wright
 

Senior Vice President, Human Resources
	 	 
	 	/s/: John W. Rowe
 

	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	9/27/2006
	 	 	 	Date: 9/27/06	 	 

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