Adopted on
September 29, 2000
Amended on January 25, 2002
Restated on March 11, 2005 as a
result of two-for-one stock split
Amended on December 2, 2005
Restated on February 17, 2006
as a result of two-for-one
stock split
Amended on January 26, 2007
AETNA INC.
NON-EMPLOYEE DIRECTOR COMPENSATION PLAN
SECTION 1.
ESTABLISHMENT OF PLAN; PURPOSE.
The Plan is hereby
established to permit Eligible Directors of the Company, in
recognition of their contributions to the Company, to receive
Shares in the manner described below. The Plan is intended to
enable the Company to attract, retain and motivate qualified
Directors and to enhance the long-term mutuality of interest
between Directors and stockholders of the Company.
When used in this
Plan, the following terms shall have the definitions set forth in
this Section:
“
Accounts ” shall mean an Eligible Director’s
Stock Unit Account and Interest Account, as described in
Section 9.
“
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.
“ Board
of Directors ” shall mean the Board of Directors of the
Company.
“
Code ” shall mean the Internal Revenue Code of 1986,
as amended, and the regulations thereunder.
“
Committee ” shall mean the Nominating and Corporate
Governance Committee of the Board of Directors or such other
committee of the Board as the Board shall designate from time to
time.
“
Company ” shall mean Aetna U.S. Healthcare Inc., a
Pennsylvania corporation. Following consummation of the
transactions contemplated by the Merger Agreement, Aetna U.S.
Healthcare Inc. will change its name to Aetna Inc.
“
Compensation ” shall mean the annual retainer fees
earned by an Eligible Director for service as a Director, the
annual retainer fee, if any, earned by an Eligible Director for
service as a member of a committee of the Board of Directors; and
any fees earned by an Eligible Director for attendance at meetings
of the Board of Directors and any of its committees.
“
Director ” shall mean any member of the Board of
Directors, whether or not such member is an Eligible
Director.
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“
Disability ” shall mean an illness or injury that
lasts at least six months, is expected to be permanent and renders
a Director unable to carry out his/her duties.
“
Effective Date ” shall mean the date on which the
transactions contemplated by the Merger Agreement are
consummated.
“
Eligible Director ” shall mean a member of the Board
of Directors who is not an employee of the Company.
“
Exchange Act ” shall mean the Securities Exchange Act
of 1934, as amended.
“ Fair
Market Value ” shall mean on any date, with respect to a
Share, the closing price of a Share as reported by the Consolidated
Tape of the 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.
“
Government Service ” shall mean the appointment or
election of the Eligible Director to a position with the federal,
state or local government or any political subdivision, agency or
instrumentality thereof.
“
Grant ” shall mean a grant of Units under
Section 5, Options under Section 7 and Other Stock Based
Awards under Section 12.
“
Interest Account ” shall mean the bookkeeping account
established to record the interests of an Eligible Director with
respect to deferred Compensation that is not deemed invested in
Units.
“ Merger
Agreement ” shall mean the Agreement and Plan of
Restructuring and Merger among ING America Insurance Holdings,
Inc., ANB Acquisition Corp., the Former Parent and for limited
purposes only, ING Groep N.V., dated as of July 19,
2000.
“
Option ” shall mean the right granted under
Section 7 to purchase the number of shares of Stock specified
by the Board of Directors, at a price and for the term fixed by the
Board of Directors in accordance with the Plan and subject to any
other limitations and restrictions as this Plan and the Board of
Directors shall impose, which such option is not intended to
qualify as an “incentive stock option” under
Section 422 of the Code.
“ Other
Stock Based Awards ” means any right granted under
Section 12.
“ Prior
Plan ” shall mean the Aetna Inc. Non-Employee Director
Deferred Stock and Deferred Compensation Plan.
“
Retirement ” shall mean (i) with respect to Units
outstanding on January 26, 2007 and (ii) with respect to Units
issued after January 26, 2007, termination of service as a
Director on or after age 72.
“
Shares ” shall mean shares of Stock.
“
Stock ” shall mean the Common Shares, $.01 par value,
of the Company.
“ Stock
Unit Account ” shall mean, with respect to an Eligible
Director who has elected to have deferred amounts deemed invested
in Units, a bookkeeping account established to record such Eligible
Director’s interest under the Plan related to such
Units.
“
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.
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“
Unit ” shall mean a contractual obligation of the
Company to deliver a Share or pay cash based on the Fair Market
Value of a Share to an Eligible Director or the beneficiary or
estate of such Eligible Director as provided herein.
“ Year of
Service as a Director ” shall mean a period of
12 months of service as a Director, measured from the
effective date of a Unit.
SECTION 3.
ADMINISTRATION.
The Plan shall be
administered by the Board of Directors. The Board of Directors
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 Board
of Directors, 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 Eligible Directors and any person
claiming under or through any Eligible Director.
Subject to the
terms of the Plan and applicable law, and in addition to other
express powers and authorizations conferred on the Board of
Directors by the Plan, the Board of Directors shall have full power
and authority to: (i) determine the number of Shares to be
covered by, or with respect to which payments, rights, or other
matters are to be calculated in connection with, Units and Options;
(ii) determine the terms and conditions of any Option;
(iii) interpret and administer the Plan and any instrument or
agreement relating to, or Grant made under, the Plan; (iv)
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 (v) make any other
determination and take any other action that the Board of Directors
deems necessary or desirable for the administration of the
Plan.
The Plan shall be
administered such that awards under the Plan shall be deemed to be
exempt under Rule 16b-3 of the Securities and Exchange
Commission under the Exchange Act (“Rule 16b-3”),
as such Rule is in effect on the Effective Date of the Plan and as
it may be subsequently amended from time to time.
SECTION 4.
SHARES AUTHORIZED FOR ISSUANCE.
4.1 Maximum
Number of Shares. The aggregate number of Shares with respect
to which Grants may be awarded to Eligible Directors under the Plan
shall not exceed 250,000 Shares, subject to adjustment as provided
in Section 4.2 below, plus that number of Shares equal to the
aggregate number of Shares credited to each Eligible
Director’s Stock Unit Account as a result of transfers of
stock units from the Prior Plan pursuant to Section 9.10. If
any Unit or Option is settled in cash or is forfeited without a
distribution of Shares, the Shares otherwise subject to such Unit
or Option shall again be available for Grants hereunder. [As of
March 11, 2005, the shares available for issuance under the
Plan were adjusted pursuant to Section 4.2 as a result of the
Company’s 2005 2-for-1 stock split. As of February 17,
2006, the shares available for issuance under the Plan were
adjusted pursuant to Section 4.2 as a result of the
Company’s 2006 2-for-1 stock split.]
4.2 Adjustment
for Corporate Transactions. In the event that any stock
dividend, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off,
combination, exchange of shares, warrants or rights offering to
purchase Stock at a price substantially below Fair Market Value, or
other similar event affects the Stock such that an adjustment is
required to preserve, or to prevent enlargement of, the benefits or
potential benefits made available under the Plan, then the Board of
Directors shall adjust the number and kind of shares which
thereafter may be awarded under the Plan and the number of Units
and Options and the exercise price thereof that have been, or may
be, granted under the Plan. Additionally, the Board of Directors
may make provisions for a cash payment to an Eligible
Director.
Page 3
5.1 Unit
Awards. Each Eligible Director (other than any Eligible
Director who has received an award under the Prior Plan) who is
first elected or appointed to the Board of Directors on or after
the Effective Date of the Plan shall be awarded 6,000 Units on such
date (or such other number of Units as the Board shall determine).
In addition, on the date of each Annual Meeting of Shareholders of
the Company occurring after 2000 and during the term of the Plan an
eligible Director serving as a Director on such date shall be
awarded such number of Units as the Board shall
determine.
5.2 Delivery
of Shares. Subject to satisfaction of the applicable vesting
requirements set forth in Section 6 and except as otherwise
provided in Section 8, all Shares that are subject to any
Units shall be delivered to an Eligible Director and transferred on
the books of the Company on the date which is the first business
day of the month immediately following the termination of such
Eligible Director’s service as a Director. Notwithstanding
the foregoing, an Eligible Director may elect that all or a portion
of his or her Units shall be payable in cash as soon as practicable
following the first business day of the month immediately following
the termination of such Eligible Director’s service as a
Director. Any fractional Shares to be delivered in respect of Units
shall be settled in cash based upon the Fair Market Value on the
date any whole Shares are transferred on the books of the Company
to the Eligible Director or the Eligible Director’s
beneficiary. The amount of any cash payment shall be determined by
multiplying the number of Units and the number of Units subject to
a cash payment election by the Fair Market Value on the last
business day preceding the payment date. Upon the delivery of a
Share (or cash with respect to a whole or fractional Share)
pursuant to the Plan, the corresponding Unit (or fraction thereof)
shall be canceled and be of no further force or effect.
5.3 Dividend
Equivalents. An Eligible Director shall have no rights as a
shareholder of the Company with respect to any Units until Shares
are delivered to the Director pursuant to this Section 5
hereof; provided that, each Eligible Director shall have the right
to receive an amount equal to the dividend per Share for the
applicable dividend payment date (which, in the case of any
dividend distributable in property other than Shares, shall be the
per Share value of such dividend, as determined by the Company for
purposes of income tax reporting) times the number of Units held by
such Eligible Director on the record date for the payment of such
dividend (a “Dividend Equivalent”). Each Eligible
Director may elect, prior to any calendar year, whether the
Dividend Equivalent is (i) payable in cash, on or as soon as
practicable after each date on which dividends are paid to
shareholders with respect to Shares; (ii) treated as
reinvested in an additional number of Units determined by dividing
(A) the cash amount of any such dividend by (B) the Fair
Market Value on the related dividend payment date; or
(iii) deferred and credited to the Eligible Director’s
Interest Account pursuant to Section 9.4.
6.1 Service
Requirements. Except as otherwise provided in this
Section 6 or Section 8, an Eligible Director shall vest
in his or her Units as provided in this Section 6.1. If an
Eligible Director terminates service prior to the completion of
three Years of Service as a Director, the number of Shares to be
delivered to such Eligible Director in respect of Units granted
upon his or her election to the Board shall equal the amount
obtained by multiplying 3,000 by a fraction, the numerator of which
is the number of full months of service completed by such Director
from the applicable date of Unit grant (counting any partial month
of service as a full month) and the denominator of which is 36. If
an Eligible Director terminates service prior to the completion of
one Year of Service as a Director from the date of Unit grant with
respect to any annual grant of Units made hereunder, the number of
Shares to be delivered to such Eligible Director in respect of such
Unit grant shall equal the amount obtained by multiplying the
number of Units subject to such Unit grant by a fraction, the
numerator of which is the number of full months of service
completed by such Director from the applicable date of the Unit
grant (counting any partial month of service as a full month) and
the denominator of which is 12. Notwithstanding the foregoing, and
except as provided in Section 6.2, if the Eligible Director
terminates service by reason of his/her death, Disability,
Retirement, or acceptance of a position in Government Service prior
to the completion of the period of service required to be performed
to fully vest in any Unit grant, all Shares that are the subject of
such Unit grant (or, if elected by the Eligible Director, the value
thereof in cash) shall be delivered to such Eligible Director (or
the Eligible Director’s beneficiary or estate).
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6.2 Six
Months’ Minimum Service. If an Eligible Director has
completed less than six consecutive months of service as a
Director, all Units held by such Eligible Director shall be
immediately forfeited. If an Eligible
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