RESTRICTED STOCK UNIT AGREEMENT
This Restricted Stock
Unit Agreement is dated as of July 23, 2003, and is between ▇▇▇▇ ▇. ▇▇▇, who resides at
___________________________ and CIGNA Corporation, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, a Delaware corporation.
You and CIGNA
Corporation, intending to be legally bound and in consideration of the promises in this
Agreement, mutually agree as follows:
| 1. |
Definitions. Under
this Agreement, these terms shall have the following meanings: |
|
(b) |
“Business” – the
assets and operations that as of the Grant Date constitute the CIGNA Retirement
& Investment Services Division. |
|
(c) |
“Change
of Control” – defined in Section 2.1 of the Stock Plan and refers to
a change of control of CIGNA Corporation. The term does not include a sale by
CIGNA Corporation of the Business, any change in the ownership of a CIGNA
Corporation subsidiary, or a sale of less than all or substantially all of
CIGNA Corporation’s assets. |
|
(e) |
“Closing” – the
effective date of a sale by CIGNA of the Business to an entity unaffiliated
with CIGNA Corporation. |
|
(f) |
“Committee” – the
People Resources Committee of CIGNA Corporation’s Board of Directors or
any successor committee with responsibility for compensation. |
|
(g) |
“Disability” – permanent
and total disability as defined in Section 22(e)(3) of the Internal Revenue
Code. |
|
(h) |
“Grant
Date” – July 23, 2003. |
|
(i) |
“Stock
Plan” – the CIGNA Corporation Stock Plan, or a successor plan. |
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|
(j) |
“Suitable
Employment” – a position that: |
|
(1) |
in
the opinion of CIGNA Corporation management, is a reasonable match with your
qualifications, skills and experience; |
|
(2) |
offers
a base salary and bonus opportunity that is no less than your current base salary and
bonus opportunity; and |
|
(3) |
is
located in Hartford, Connecticut, or within what CIGNA Corporation management, at its
sole discretion, considers to be a reasonable commuting distance from your current
permanent residence (any distance that is no longer than your current commute will be
deemed to be reasonable). |
|
(k) |
“Termination
of Employment” – |
|
(1) |
On
or before the date of a Closing: the end of your employment relationship with CIGNA or
the occurrence of a transaction by which any CIGNA Corporation subsidiary that employs
you ceases to be a CIGNA Corporation subsidiary. The end of your employment relationship
with CIGNA upon the Closing, however, shall not be a Termination of Employment under this
Agreement if immediately after the Closing you are employed by the Business (or the
purchaser of the Business). |
|
(2) |
After
a Closing: the end of your employment relationship with the Business (or the purchaser of
the Business). |
|
(l) |
“Termination
upon a Change of Control” – a Termination of Employment upon or within two
years after a Change of Control initiated by: |
|
(1) |
CIGNA
or a successor corporation (other than a Termination of Employment initiated by CIGNA on
account of your conviction for a felony involving fraud or dishonesty directed against
CIGNA); or |
|
(2) |
you
and is pursuant to your written certification that the Change of Control has rendered you
unable to perform the duties and responsibilities of the position you held immediately
prior to the Change of Control because of adverse changes in your authority,
compensation, office location, duties, responsibilities, or title. |
|
(m) |
“Units” – the
restricted stock units described in paragraph 2. |
|
(n) |
“Vesting
Date” – the date your right to Units vests under paragraph 3. |
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| 2. |
Restricted
Stock Units. |
| (a) |
CIGNA
Corporation grants you 15,000 Units, effective as of the Grant Date. |
| (b) |
Each
Unit represents your right to receive, under the terms and conditions described in this
Agreement, payment of: |
|
(1) |
One
share of CIGNA Corporation common stock; and |
|
(2) |
Dividend
equivalents (described in paragraph 5) on one share of CIGNA Corporation common stock
from the Grant Date until the Vesting Date. |
| (c) |
Your
right to Unit payments is subject to the conditions described in this Agreement,
including the forfeiture provisions described in paragraph 3. |
| (a) |
Except
as provided in paragraph 3(e), you shall forfeit the Units, and shall have no right to
receive any Unit payments, if your Termination of Employment occurs before the Vesting
Date. |
| (b) |
Except
as provided in paragraph 3(c), the Vesting Date for all Units shall be July 1, 2006. |
| (c) |
If
a Closing occurs before July 1, 2006, the Vesting Date for all the Units shall be the
earlier of: |
|
(1) |
Three
months after the date of the Closing, if (except as provided in paragraph 3(d)) you
remain continuously employed by the Business (or the purchaser of the Business) for the
entire three-month post-Closing period; or |
|
(2) |
The
date of the Closing, if (A) immediately after the Closing you are not an employee of the
Business (or the purchaser of the Business) because the purchaser fails to offer you
Suitable Employment upon the Closing and (B) CIGNA fails to offer you Suitable Employment
effective upon the Closing. |
| (d) |
If
you are employed by the Business (or the purchaser of the Business) immediately after a
Closing but do not remain employed for the entire three-month post-Closing period as
described in paragraph 3(c)(1), the Units shall nevertheless become vested three months
after the Closing if your Termination of Employment is initiated by the Business (or the
purchaser of the Business) other than on account of your misconduct. |
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| (e) |
The
forfeiture described in paragraph 3(a) shall not apply and the Units shall immediately
become vested upon your Termination of Employment if: |
|
(1) |
Your
Termination of Employment occurs before the Vesting Date and is due to your death or
Disability; or |
|
(2) |
Your
Termination of Employment occurs before both the Vesting Date and a Closing Dateand is a
Termination upon a Change of Control. |
4. Shares. If the Units
vest under paragraph 3, CIGNA Corporation will
issue the shares of CIGNA Corporation stock described in paragraph 2(b)(1) effective as
of the Vesting Date. The shares will be issued under Article 9 of the Stock Plan as a
grant in lieu of an award under a Qualifying Incentive Plan (as that term is defined in
the Stock Plan). This Agreement is deemed to be a Qualifying Incentive Plan. Issuance of
the shares shall be subject to the vesting and other provisions of this Agreement and the
Stock Plan.
| (a) |
From
the Grant Date until the Vesting Date, on or about each date that CIGNA Corporation makes
dividend payments with respect to shares of common stock, CIGNA shall pay you an amount
equal to the per share dividend for each Unit granted to you under paragraph 2 that has
not yet become vested. |
| (b) |
Your
right to further payment of any dividend equivalents under paragraph 5(a) shall end
immediately if you forfeit the Units. |
6. Death. If you die before all Units payments have been made to you
under this Agreement, any remaining Unit payments will be made within 90 days of your
death to your surviving spouse or, if you have no surviving spouse, to your estate.
| (a) |
The
Committee shall make a proportionate adjustment in the number of shares described in
paragraphs 2(b)(1) and (2) in the event of a stock dividend, stock split, or other
subdivision or combination of CIGNA Corporation Common Stock. |
| (b) |
The
Committee shall make an appropriate adjustment in the number and/or kind of shares
described in paragraphs 2(b)(1) and (2) if the outstanding shares of CIGNA Corporation
common stock are changed or converted into, exchanged or exchangeable for, a different
number or kind of shares or other securities of CIGNA Corporation or of another
corporation, by reason of a reorganization, merger, consolidation, reclassification or
combination (an Event), so that your proportionate interest shall be maintained as before
the Event. However, in case of any contemplated Event that may constitute a Change of
|
4
| |
Control, the Committee, with the approval of a majority of the members of CIGNA
Corporation’s Board of Directors who are not then CIGNA employees, may modify any
and all outstanding Units and Unit payment rights, so as to accelerate, as a consequence
of or in connection with the Event, the vesting of your Units and/or your rights to any
Unit payment. |
8. Confidentiality. You agree to keep confidential (a) the existence and
terms of this Agreement and (b) all other confidential business information about CIGNA
or the Business, unless and until such time as (x) any such information becomes generally
available and known to the public (other than as a result of a disclosure by you in
violation of this Agreement or by any other person in violation of any obligation of
confidentiality) or (y) may be required by applicable law or regulation.
9. Effect of Agreement. This Agreement is not a contract of employment
for any specified term, and nothing in it is intended to change, and it shall not be
construed as changing, the nature of your employment from an at-will relationship. This
Agreement is limited to the terms and conditions that it includes and does not otherwise
address your compensation or benefits, your duties and responsibilities, or any of CIGNA’s
rights as employer. This Agreement contains the entire agreement between you and CIGNA
Corporation with respect to the matters addressed herein and fully replaces and
supersedes any and all prior agreements or understandings between them related to such
matters.
10. Applicable Law. The Agreement is made and entered into in the State
of Connecticut, and at all times and for all purposes shall be interpreted, enforced and
governed under its laws without regard to principles of conflict of laws.
11. Arbitration of Disputes. It is agreed that any controversy or claim
arising out of or relating to this Agreement shall be settled exclusively by arbitration
in Hartford, Connecticut, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and judgment upon the award rendered by the
Arbitrator(s) may be entered in any court having jurisdiction thereof.
12. Successors. CIGNA Corporation’s rights and obligations under
this Agreement will inure to the benefit of, and be binding upon, CIGNA Corporation’s
successors and assigns. Your rights under this Agreement, including the right to receive
CIGNA Corporation common stock or any other payment, shall not be assignable or
transferable by you except by will or by the laws of descent and distribution. Any other
attempted assignment or alienation shall be void and of no force or effect.
13. Funding of Payments. CIGNA Corporation’s obligations under
this Agreement to issue shares and make cash payments are unfunded and unsecured
promises, and shall be considered as such for tax purposes and for purposes of the
Employee Retirement Income and Security Act of 1974. Cash shall be paid when due out of
CIGNA Corporation’s general assets.
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14. Withholding. Unit payments shall be subject to applicable tax
withholding, and CIGNA Corporation reserves the right to withhold enough shares to cover
all or part of any applicable tax withholding.
15. Changes to Agreement. Any amendment to this Agreement must be in
writing and signed by both you and CIGNA Corporation.
IN WITNESS WHEREOF, the
persons named below have signed this Agreement on the dates shown below.
7/24/03
Date |
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
On behalf of
CIGNA Corporation |
| |
|
| |
|
| 7/29/03 |
/s/ ▇▇▇▇ ▇. ▇▇▇ |
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