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Exhibit 10.3
AETNA PERFORMANCE UNIT AWARD AGREEMENT
AETNA
PERFORMANCE UNIT AWARD AGREEMENT, dated as of
between AETNA INC., a Pennsylvania corporation (the "Company"), and
(the "Executive") pursuant to the Company’s 2000 Stock
Incentive Plan (the "Plan").
1.
Confirmation of Grant . The Company hereby evidences and
confirms its grant to the Executive, effective as of the date
hereof, of an award of ___ Performance Units which represent
the Company’s obligation, subject to the satisfaction of the
conditions as to vesting set forth in Section 2 below, to pay
cash upon the terms and conditions set forth herein (the "Award").
Each unit represents a potential future payment to the Executive of
$___(before taking into account federal, state or local taxes). The
Award may be settled in cash or stock at the discretion of the
Committee.
This
Agreement is subject in all respects to the terms of the Plan,
which is incorporated into this Agreement and made a part hereof.
Terms used in this Agreement with initial capital letters, but not
defined herein, shall have the same meanings as they have under the
Plan.
2.
Vesting .
(a)
At the End of the Performance Period . The Performance Units
awarded hereby will become vested only to the extent that
the Committee determines that the performance goals established by
the Committee for the performance period
through
(the "Performance Goals" and "Performance Period", respectively)
have been achieved. The Performance Goals and related vesting
schedule are set forth on Exhibit A to this Agreement which is
incorporated into this Agreement and is made a part hereof.
(b)
Acceleration of Vesting and Payout of Performance Units Upon a
Change in Control . Notwithstanding any other provision of this
Agreement to the contrary, if a Change in Control (as defined
below) shall occur, the Performance Units not previously forfeited
pursuant to this Agreement shall become immediately vested at a
level which equals the greater of (x) 100% vesting or
(y) the number of Performance Units that would have vested
based on the Company’s actual performance level using the
date on which the Change in Control occurs as the end of the
Performance Period. The Executive shall be paid as soon as is
practicable, but in no event later than fifteen business days
following the Change in Control, the value of the Performance
Units, without regard to any prior deferral election in effect and
without regard to Section 3(a) hereof.
The
term "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 2(b)(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
Executive, if Executive 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.
For purposes of this Section 2(b) the term "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.
3.
Deferral of Distributions .
(a)
Mandatory Deferral . If the Committee determines that
Section 162(m) of the Code would preclude the Company (and, as
applicable, a Subsidiary or Affiliate) from receiving a Federal
income tax deduction upon a distribution of an Award, the Committee
shall have the authority to defer the timing of any such
distribution in accordance with this Section 3. If the
Committee determines that any such distribution should be deferred,
it shall be deferred until the earliest date or dates at which the
Award may be distributed without presenting a material risk that
Section 162(m) of the Code would preclude the receipt of a Federal
income tax deduction with respect to the Award distributed. To the
extent any portion (but not all) of the Award whose distribution is
deferred hereunder can be distributed in a given year under the
standard set forth in the preceding sentence, such portion shall be
so distributed. Notwithstanding anything else contained herein to
the contrary, the Award which the Executive is entitled to receive
in accordance with the terms of this Agreement (absent application
of this Section 3(a)) shall be distributed to the Executive as
soon as practicable after the first business day of the calendar
year following the termination of the Executive’s employment
with the Company and each of its Subsidiaries and Affiliates.
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(b)
Voluntary Deferral . At such times and upon such terms and
conditions as the Company shall determine, the Company may permit
the Executive to elect to defer the distribution of an Award
otherwise payable to the Executive under this Agreement until
termination of the Executive’s Employment or such other date
as the Executive shall specify in the deferral election.
(c)
Earnings on Deferral . If any payment is deferred pursuant
to this Section 3, such amount shall be placed in a
bookkeeping account and the value of the account shall be
determined during such deferral period according to a formula to be
determined from time to time by the Company.
4.
Termination of Employment .
(a)
Special Termination . In the event that the
Executive’s Employment with the Company and each of its
Subsidiaries and Affiliates terminates by reason of the
Executive’s death, Disability or Retirement or involuntary
termination of Employment by the Company for reasons other than
misconduct (including violation of the Company’s Code of
Conduct) (each a "Special Termination"), then the Performance Units
awarded hereunder shall become vested and nonforfeitable, if at
all, after the date of termination of Employment and at the end of
the Performance Period, as the case may be, as to that number of
Units which is equal to that percentage, if any, of such number of
Performance Units that would have become vested under
Section 2 at the end of the Performance Period, times a
fraction as follows: the numerator is the number of days occurring
on or after
and the denominator is ___. Notwithstanding anything in this
Section 4(a) to the contrary, if following the Executive’s
termination of Employment, the Committee determines that the
Executive has engaged in conduct, whether before or after the
Executive’s termination of Employment, that would have
constituted grounds to terminate employment for Cause had the
Executive still been employed at the time of such determination,
all of the Executive’s Performance Units shall be forfeited
as of the date of such determination.
(b)
Other Termination of Employment . Unless the Committee shall
otherwise determine, in the event that the Executive’s
Employment with the Company and each of its Subsidiaries and
Affiliates terminates for any reason other than a Special
Termination, any portion of the Performance Units that has not
become vested pursuant to Section 2 at the date of the
Executive’s termination of Employment shall be forfeited as
of the date of such termination of Employment.
For
purposes of this Section 4, the term "Employment" shall refer
to active employment with the Company and shall not include
severance or salary continuation periods or any other approved
leaves of absence and the term "Retirement" shall mean termination
of Employment by Executive provided the Executive’s age and
completed years of service total 65 or more points at such
termination.
5.
Capital Adjustments . In the event that the Committee shall
determine that any Fundamental Corporate Event affects the Common
Stock or the Performance Goals such that an adjustment is required
to preserve, or to prevent enlargement of, the benefits or
potential benefits made available under this Agreement, then the
Committee may make an adjustment in the Performance Goals, in such
manner as the Committee may deem equitable.
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6.
Amendments . The Committee shall have the right, in its sole
discretion, to alter or amend this Agreement, from time to time, as
provided in the Plan, provided that no such amendment shall
reduce the Executive’s rights under this Agreement without
the Executive’s consent. Notwithstanding, this limitation on
amendments is not intended to reduce the Committee’s
authority to construe, interpret and administer the Plan and this
Award or to establish or modify the Performance Goals or determine
whether the Performance Goals have been met. Subject to the first
sentence of this Section 6, any alteration or amendment of
this Agreement by the Committee shall, upon adoption thereof by the
Committee, become and be binding and conclusive on all persons
affected thereby without requirement for consent or other action
with respect thereto by any such person. The Company shall give
written notice to the Executive of any such alteration or amendment
of this Agreement as promptly as practicable after the adoption
thereof. This Agreement may also be amended by a written agreement
signed by both the Company and the Executive.
7.
Additional Consideration for Grant .
(a)
Nondisclosure, Nonsolicitation, Cooperation and Intellectual
Property . As consideration for the grant of Performance Units
evidenced hereby, without the prior written consent of the
Company:
(i) the Executive shall not
(except to the extent required by an order of a court having
competent jurisdiction or under subpoena from an appropriate
government agency) disclose to any third person, whether during or
subsequent to the Executive’s Employment, any trade secrets,
confidential information or proprietary materials, which may
include but are not limited to, the following categories of
information and materials: customer lists and identities, employee
lists and identities, provider lists, product development and
related information, marketing plans and related information, sales
plans and related information, premium or any other pricing
information, operating policies and manuals, research, payment
rates, methodologies, contractual forms, business plans, financial
records, computer programs and databases or other financial,
commercial, business or technical information related to the
Company or any Subsidiary or Affiliate unless such
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