Exhibit 10.2
CIGNA EXECUTIVE SEVERANCE
BENEFITS PLAN
(Amended and Restated Effective July
22, 2008)
ARTICLE 1
Definitions
The following
are defined terms wherever they appear in this Plan.
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“Additional Payment”
– the benefit described in
Section 3.5 of the Plan.
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“Affiliate” – the meaning set forth in Rule 12b-2
promulgated under the Exchange Act.
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“Basic
Severance Pay” – the severance pay described in Section
3.2 of the Plan.
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“Beneficial Owner”
and “Beneficially
Owned” – the meaning set forth in Rule 13d-3
promulgated under the Exchange Act.
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“Board” – the Board of Directors of CIGNA
Corporation or a successor.
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“CIGNA” – CIGNA Corporation, a Delaware
corporation, its subsidiaries, successors and
predecessors.
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“Change of Control”
– any of the
following:
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A corporation,
person or group acting in concert, as described in Exchange Act
Section 14(d)(2), holds or acquires beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act of a
number of preferred or common shares of CIGNA Corporation having
25% or more of the combined voting power of CIGNA
Corporation’s then outstanding securities; or
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There is
consummated a merger or consolidation of CIGNA Corporation or any
direct or indirect subsidiary of CIGNA Corporation with any other
corporation, other than:
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a merger or
consolidation immediately following which the individuals who
constituted the Board immediately prior thereto constitute at least
a majority of the board of directors of the entity surviving such
merger or consolidation or the ultimate parent thereof,
or
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a merger or
consolidation effected to implement a recapitalization of CIGNA
Corporation (or similar transaction) in which no Person is or
becomes the Beneficial Owner, directly or indirectly, of securities
of CIGNA Corporation (not including in the securities Beneficially
Owned by such Person any securities acquired directly from CIGNA
Corporation or its Affiliates) representing 25% or more of the
combined voting power of CIGNA Corporation’s then outstanding
securities;
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A change occurs
in the composition of the Board at any time during any consecutive
24-month period such that the Continuity Directors cease for any
reason to constitute a majority of the Board. For
purposes of the preceding sentence “Continuity
Directors” shall mean those members of the Board who either:
(1) were directors at the beginning of such consecutive 24-month
period; or (2) were elected by, or on nomination or recommendation
of, at least a majority of the Board (other than a director whose
initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of CIGNA
Corporation); or
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The
shareholders of CIGNA Corporation approve a plan of complete
liquidation or dissolution of CIGNA Corporation or there is
consummated an agreement for the sale or disposition by CIGNA
Corporation of all or substantially all of CIGNA
Corporation’s assets, other than a sale or disposition by
CIGNA Corporation of all or substantially all of CIGNA
Corporation’s assets immediately following which the
individuals who constituted the Board immediately prior thereto
constitute at least a majority of the board of directors of the
entity to which such assets are sold or disposed or any parent
thereof.
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Notwithstanding
the foregoing, a “Change of Control” shall not be
deemed to have occurred by virtue of the consummation of any
transaction or series of integrated transactions immediately
following which the record holders of the common stock of CIGNA
Corporation immediately prior to such transaction or series of
transactions continue to have substantially the same
proportionate ownership in an entity which owns all or
substantially all of the assets of CIGNA Corporation immediately
following such transaction or series of transactions.
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“Code” – the Internal Revenue Code of 1986, as
amended.
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“Committee” – the People Resources Committee of the
Board, or a successor committee.
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“Covered Executive”
– any person employed by CIGNA
in a role in Career Band 6 or 7 on, or at any time within two years
after, the date a Change of Control occurs.
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"Covered
Senior Executive" –
a Covered Executive who is also an “executive officer”
as defined in Rule 3b-7 promulgated under the Exchange Act on, or
at any time within two years after, the date a Change of Control
occurs.
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“Excess Parachute
Payments” –
the amount defined in Code Section 280G.
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“Exchange Act”
– the Securities Exchange Act
of 1934, as amended.
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“Excise Tax” – any excise tax under Code Section 4999
for any Excess Parachute Payments and any similar tax.
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“Parachute Payments”
– any payments defined in Code
Section 280G(b)(2).
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“Participant”
– an employee of CIGNA who
meets the eligibility requirements in Article 2.
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“Payment Cap”
– the maximum amount of
Severance Payments a Separated Participant would be entitled to
receive without being subject to the excise tax imposed by Section
4999 of the Code.
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"Person" – the meaning given in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof, except that such term shall not include (a) CIGNA
Corporation or any of its Subsidiaries, (b) a trustee or other
fiduciary holding securities under an employee benefit plan of
CIGNA Corporation or any of its Affiliates, (c) an underwriter
temporarily holding securities pursuant to an offering of such
securities, or (d) a corporation owned, directly or indirectly, by
the stockholders of CIGNA Corporation in substantially the same
proportions as their ownership of stock of CIGNA
Corporation.
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“Plan” – the CIGNA Executive Severance Benefits
Plan (Amended and Restated Effective July 22, 2008), as it may be
amended from time to time.
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“Separated Participant”
– a Participant who has had a
Separation upon a Change of Control.
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“Separation Date”
– the date of a
Participant’s Separation from Service.
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“Separation for Cause”
– a Separation
from Service initiated by CIGNA on account of the conviction of an
employee of a felony involving fraud or dishonesty directed against
the Company.
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“Separation from Service”
– a Participant’s death,
retirement or other termination of employment, from the
Participant’s employer or service recipient within the
meaning of Treasury Regulation Section 1.409A-1(h). For this
purpose, the level of reasonably anticipated, permanently reduced,
bona fide services that will be treated as a Separation from
Service is 30%. Generally, a Participant’s
Separation from Service occurs when the Participant’s level
of services to CIGNA Corporation and its affiliates is reduced by
70% or more.
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“Separation upon a Change of
Control” – a
Separation from Service within two (2) years following a Change of
Control (a) initiated by CIGNA or a successor, other than a
Separation for Cause, or (b) initiated by the Participant after
determining in the Participant's reasonable judgment that there has
been a material reduction in the Participant's authority, duties or
responsibilities, any reduction in the Participant's compensation,
or any changes caused by CIGNA or successor in the Participant's
principle office location of more than thirty-five (35) miles from
its location on the date of the Change of
Control. Participant shall have notified the Executive
Vice President – Human Resources and Services or the Chief
Executive Officer in writing that he has experienced such a
reduction or change, and shall describe the event that he believes
constitutes such a reduction or change. The written
notice and explanation must be delivered within 30 calendar days
after such reduction or change and at least 30 days before
separation. CIGNA shall have 30 days following receipt
of the written notification to remedy the conditions causing the
event before Participant may have a Separation upon a Change of
Control under Section 1.24(b).
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“Severance Payment”
– any payment, distribution or
economic benefit to or for the benefit of a Separated Participant
payable under the Plan or otherwise in connection with a Change of
Control or Participant’s Separation upon a Change of Control,
regardless of the plan or arrangement under which the payments are
made. The term shall include, but not be limited to,
Basic Severance Pay and Supplemental Severance Pay under this Plan
and any economic benefit received by the Separated Participant
because of the acceleration of any rights under the CIGNA Long-Term
Incentive Plan, or any predecessor or similar plan, regarding stock
options, restricted stock grants, stock appreciation rights and
dividend equivalent rights.
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“Supplemental Severance
Pay” – the
severance pay described in Section 3.3 of the Plan.
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“
Subsidiary ” – a corporation (or a partnership,
joint venture or other unincorporated entity) of which more than
50% of the combined voting power of all classes of stock entitled
to vote (or more than 50% of the capital, equity or profits
interest) is owned directly or indirectly by CIGNA Corporation;
provided that such corporation (or other entity) is included in
CIGNA Corporation’s consolidated financial statements under
generally accepted accounting principles.
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ARTICLE 2
Eligibility
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