<PAGE> 1
As filed with the Securities and Exchange Commission on December 14, 1998
Registration No. 333-___
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
AETNA INC.
(Exact name of registrant as specified in its
charter)
<TABLE>
<CAPTION>
Connecticut 6719 02-0488491
<S> <C> <C>
(state or other junction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
151 FARMINGTON AVENUE
HARTFORD, CT 06156
(860) 273-0123
(Address of principal executive offices)
------------------------------------------------
AETNA INC.
1998 STOCK INCENTIVE PLAN
(Full title of the plan)
------------------------
Lucille M. Nickerson
Vice President, Corporate Governance and Corporate Secretary
Aetna Inc.
151 Farmington Avenue
Hartford, CT 06156
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (860) 273-0123
Copy to:
Judith H. Jones, Counsel
Aetna Inc.
151 Farmington Avenue
Hartford, CT 06156
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------- ------------------------ ------------------------ ----------------------- ------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING AGGREGATE AMOUNT OF
TO BE REGISTERED (1) REGISTERED (2) PRICE PER SHARE (3) OFFERING PRICE (3) REGISTRATION FEE
- ---------------------------- ------------------------ ------------------------ ----------------------- ------------------------
<S> <C> <C> <C> <C>
Common Stock (par value
$0.01 per share . . . . 10,000,000 shares $77.50 $775,000,000 $215,450
- ---------------------------- ------------------------ ------------------------ ----------------------- ------------------------
</TABLE>
(1) This Registration Statement also pertains to Rights to Purchase one
one-hundredth of a share of Class B Voting Preferred Stock, Series A,
par value $.0l per share, of the Registrant (the "Rights"). Until the
occurrence of certain prescribed events, the Rights are not exercisable,
are evidenced by the certificates for Aetna Inc. Common Stock and will
be transferred along with and only with such securities. Thereafter,
separate Rights certificates will be issued representing one Right for
each share of Aetna Inc. Common Stock held subject to adjustment
pursuant to anti-dilution provisions.
(2) Plus an indeterminate number of additional shares which may be offered
and issued to prevent dilution resulting from stock splits, stock
dividends or similar transactions.
(3) Estimated solely for purposes of calculating the registration fee and
are based on the average of high and low prices of the Common Stock on
the New York Stock Exchange on December 11, 1998, in accordance with
Rule 457 under the Securities Act of 1933, as amended.
<PAGE> 2
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Aetna Inc. (the "Company" or the "Registrant") hereby incorporates by
reference the following documents:
(a) the Company's Annual Report on Form 10-K for the year
ended December 31, 1997;
(b) all other reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of the fiscal
year covered by the Annual Report referred to above,
including: the Company's Quarterly Report on Form
10-Q for the quarters ended March 31, 1998, June 30,
1998 and September 30, 1998 and the Company's current
reports on Form 8-K filed March 16, 1998, May 21,
1998, November 24, 1998 and December 10, 1998; and
(c) the description of the Company's Common Stock and
Share Purchase Rights Plan contained in its
Registration Statement filed pursuant to Section 12
of the Exchange Act, including any amendment to
report filed for the purpose of updating those
descriptions.
All documents subsequently filed by the company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to
the filing of a post effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in the registration
statement and to be part hereof from the date of filing of such documents. Any
statement contained herein or in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or amended, to constitute
a part of this Registration Statement.
2
<PAGE> 3
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Judith H. Jones rendered an opinion as to the legality of the
securities being registered and is presently an employee of the Company and
several companies affiliated with the Company, and is eligible to participate in
the Plan.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant is a Connecticut corporation. Section 33-771
of the Connecticut General Statutes ("C.G.S.") provides for indemnification of
directors and Section 33-776 provides for indemnification of officers, employees
and agents of Connecticut corporations. These statutes provide in general that
Connecticut corporations incorporated prior to January 1, 1997 shall indemnify
their officers, directors, employees and agents against "liability" (defined as
the obligation to pay a judgment, settlement, penalty, fine, including an excise
tax assessed with respect to an employee benefit plan, or reasonable expenses
incurred with respect to a proceeding). In the case of a proceeding by or in the
right of the corporation, indemnification is limited to reasonable expenses
incurred in connection with the proceeding against the corporation to which the
individual was named a party. The corporation's obligation to provide such
indemnification does not apply unless (1) the individual has met the standard of
conduct set forth in Section 33-771; and (2) a determination is made (by
majority vote of a quorum of the board of directors who were not parties to the
proceeding, or if a quorum cannot be obtained, by a committee of the board
selected as described in Section 33-775(b)(1); by special legal counsel selected
by the board of directors or members thereof as described in Section
33-775(b)(2); or by shareholders) that the individual met the standard set forth
in Section 33-771;or (3) the court, upon application by the individual,
determines in view of all the circumstances that such person is reasonably
entitled to be indemnified. Section 33-772 and Section 33-776(c) provide,
respectively, that a corporation shall indemnify a director who was wholly
successful, on the merits or otherwise, in the defense of any proceeding to
which he was a party because he was a director of the corporation against
reasonable expenses incurred by him in connection with the proceeding, and that
an officer, employee or agent of a corporation who is not a director is entitled
to mandatory indemnification under Section 33-772, and may apply to a court
under Section 33-774, for indemnification or advance for expenses, in each case
to the same extent to which a director may be entitled to indemnification or
advance for expenses under those sections. Also, under Sections 33-773 and
33-776, a corporation may provide indemnification of or advance expenses to a
director, officer, employee or agent only as permitted by Sections 33-770 to
33-778, inclusive, of the Connecticut General Statutes, as amended. The statute
authorizes a corporation to procure indemnification insurance on behalf of an
individual who is or was a director, officer, employer or agent of the
corporation. Consistent with the statute, Aetna has procured insurance coverage
from several carriers for directors and officers of Aetna and its subsidiaries
which supplements the indemnification rights provided to those individuals by
the C.G.S. Unlike the statute, these policies do not require an after-the-fact
determination of good faith in order for the insured director or officer to
receive the benefits provided under the policies nor do they require affirmative
judicial or corporate action as a prerequisite to the insurance company's duty
to defend (and pay for the defense of) the insured director or officer under the
policies. Furthermore, the insurance policies will cover directors and officers
for any acts not specifically excluded for which the director or officer is not
3
<PAGE> 4
eligible for indemnification under C.G.S. Section 33-771 and 33-776, to the
extent such coverage does not violate public policy. As permitted under
Connecticut law, Aetna's Certificate of Incorporation limits the personal
liability of directors for monetary damages to Aetna and its shareholders for a
breach of fiduciary duty as a director to the amount of compensation for serving
Aetna as a director during the year of the violation. These provisions do not
eliminate the liability of a director if such breach (i) involved a knowing and
culpable violation of law by the director, (ii) enabled the director or an
associate (as defined) to receive an improper personal gain, (iii) showed a lack
of good faith and a conscious disregard for the duty of the director to Aetna
under circumstances in which the director was aware that his or her conduct or
omission created an unjustifiable risk of serious injury to Aetna, (iv)
constituted a sustained and unexcused pattern of inattention that amounted to an
abdication of the director's duty to Aetna or (v) created liability under C.G.S.
Section 33-757 (relating to the distribution of assets of Aetna, whether by
dividend, purchase or redemption of shares or otherwise, in violation of the
Connecticut corporation law).
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The following is a complete list of exhibits filed as part of
this Registration Statement:
Exhibit
No.
- -------
4.1 Aetna Inc. Amended and Restated Certificate of Incorporation
(incorporated by reference to Exhibit 3.1 to the Registrant's
Registration Statement under the Securities Act of 1933 on Form S-4,
Registration No. 333-05791 ("Form S-4")).*
4.2 Aetna Inc. By-Laws (incorporated by reference to Exhibit 3.2 to the
Form S-4).*
4.3 Aetna Inc. Rights Plan (incorporated by reference to Exhibit 4.2 to the
Form S-4).*
4.4 Aetna Inc. 1998 Stock Incentive Plan
5.1 Opinion of Judith H. Jones, Counsel, Aetna Inc.
15.1 Letter of KPMG Peat Marwick LLP re: Unaudited Interim Financial
Information.
23.1 Consent of Judith H. Jones, Counsel, Aetna Inc. (included in Exhibit
5.1 hereto).
23.2 Consent of KPMG Peat Marwick LLP
24.1 Power of Attorney.
- --------------
* Incorporated by reference as indicated.
4
<PAGE> 5
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the 1933 Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in this registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the 1934 Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the 1933
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the registrant's
Annual Report pursuant to Section 13(a) or Section 15(d) of the 1934 Act (and,
where applicable, each filing of an employee benefit plan's Annual Report
pursuant to Section 15(d) of the 1934 Act) that is incorporated by reference in
the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore,
5
<PAGE> 6
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Hartford, Connecticut, on the 14th day of December 1998.
AETNA INC.
By: /s/ Judith H. Jones
---------------------------------------
Name: Judith H. Jones
Title: Counsel
6
<PAGE> 7
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Richard L. Huber* Chairman, Chief Executive Officer December 14, 1998
- ------------------------------------------- (Principal Executive Officer)
Richard L. Huber
/s/ Leonard Abramson* Director December 14, 1998
- -------------------------------------------
Leonard Abramson
/s/ Betsy Z. Cohen* Director December 14, 1998
- -------------------------------------------
Betsy Z. Cohen
/s/ William H. Donaldson* Director December 14, 1998
- -------------------------------------------
William H. Donaldson
/s/ Barbara Hackman Franklin* Director December 14, 1998
- -------------------------------------------
Barbara Hackman Franklin
/s/ Jerome S. Goodman* Director December 14, 1998
- -------------------------------------------
Jerome S. Goodman
/s/ Earl G. Graves* Director December 14, 1998
- -------------------------------------------
Earl G. Graves
/s/ Gerald Greenwald* Director December 14, 1998
- -------------------------------------------
Gerald Greenwald
/s/ Ellen M. Hancock* Director December 14, 1998
- -------------------------------------------
Ellen M. Hancock
/s/ Michael H. Jordan* Director December 14, 1998
- -------------------------------------------
Michael H. Jordan
/s/ Jack D. Kuehler* Director December 14, 1998
- -------------------------------------------
Jack D. Kuehler
/s/ Frank R. O'Keefe, Jr.* Director December 14, 1998
- -------------------------------------------
Frank R. O'Keefe, Jr.
/s/ Judith Rodin* Director December 14, 1998
- -------------------------------------------
Judith Rodin
/s/ Alan J. Weber* Vice Chairman for Strategy and Finance December 14, 1998
- ------------------------------------------- (Principal Financial Officer)
Alan J. Weber
/s/ Alan M. Bennett* Vice President, Finance and Corporate December 14, 1998
- ------------------------------------------- Controller (Principal Accounting Officer)
Alan M. Bennett
</TABLE>
*By: /s/ Judith H. Jones
-------------------------------------
(Judith H. Jones
Attorney-in-Fact)
7
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Exhibit Numbered Page
- ------ ------- -------------
<S> <C> <C>
4.1 Aetna Inc. Amended and Restated Articles of Incorporation (incorporated by *
reference to Exhibit 3.1 of the Registrant's Securities Act of 1933 Registration
on Form S-4 dated, Registration No. 333-05791 ("Form S-4")).
4.2 Aetna Inc. By-Laws (incorporated by reference to Exhibit 3.2 of the Form S-4). *
4.3 Aetna Inc. Rights Plan (incorporated by reference to Exhibit 4.2 to the Form S-4). *
4.4 Aetna Inc. 1998 Stock Incentive Plan
5.1 Opinion of Judith H. Jones, Counsel, Aetna Inc.
15.1 Letter of KPMG Peat Marwick LLP re: Unaudited Interim Financial Information.
23.1 Consent of Judith H. Jones, Counsel, Aetna Inc. (included in Exhibit 5.1 hereto).
23.2 Consent of KPMG Peat Marwick LLP
24.1 Power of Attorney.
</TABLE>
- ----------------
* Incorporated by reference.
<PAGE> 1
EXHIBIT 4.4
AETNA INC.
1998 STOCK INCENTIVE PLAN
SECTION 1. PURPOSE.
The purposes of this Plan are to promote the interests of the Company and
its shareholders, and further align the interests of shareholders and
Participants by:
(i) motivating Participants through Awards granted under the
Plan;
(ii) attracting and retaining outstanding individuals as
Participants;
(iii) enabling Participants to acquire additional equity
interests in the Company; and
(iv) providing compensation opportunities dependent upon the
Company's performance relative to its competitors and changes in its
own performance over time.
SECTION 2. DEFINITIONS.
"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.
"AWARD" shall mean a grant or award under the Plan, as evidenced in a
written document delivered to a Participant as provided in Section 13(b).
"BOARD" shall mean the Board of Directors of the Company.
"CAUSE" shall mean (i) the willful failure by the Participant to perform
substantially the Participant's duties as an employee of the Company (other than
due to physical or mental illness) after reasonable notice to the Participant,
(ii) the Participant's engaging in serious misconduct that is injurious to the
Company, any Subsidiary or any Affiliate, (iii) the Participant's having been
convicted of, or entered a plea of nolo contendere to, a crime that constitutes
a felony, (iv) the breach by the Participant of any written covenant or
agreement not to compete with the Company, any Subsidiary or any Affiliate or
(v) the breach by the Participant of his or her duty of loyalty to the Company
which shall include, without limitation, (A) the disclosure by the Participant
of any confidential information pertaining to the Company, any Subsidiary or any
Affiliate, (B) the harmful interference by the Participant in the business or
operations of the Company, any Subsidiary or any Affiliate, (C) any attempt by
the Participant directly or indirectly to induce any employee, insurance agent,
insurance broker or broker-dealer of the Company, any Subsidiary or any
Affiliate to be employed or perform services elsewhere, (D) any attempt by the
Participant directly or indirectly to solicit the trade of any customer or
supplier, or prospective customer or supplier, of the Company or (E) any breach
or violation of the Company's Code of Conduct.
<PAGE> 2
"CODE" shall mean the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"COMMITTEE" shall mean a committee of the Board as may be designated by
the Board to administer the Plan, which, to the extent necessary to comply with
Section 16 of the Exchange Act and Section 162(m) of the Code, shall consist of
at least two directors of the Company chosen by the Board each of whom is a
"disinterested person" within the meaning of Rule 16b-3 under the Exchange Act
and an "outside director" within the meaning of Section 162(m).
"COMMON STOCK" shall mean the common stock, $.01 par value, of the
Company.
"COMPANY" shall mean Aetna Inc.
"ELIGIBLE EMPLOYEE" shall mean each employee of the Company, its
Subsidiaries or its Affiliates, but shall not include Directors and Executive
Officers of the Company. Any individual the Company designates as, or otherwise
determines to be, an independent contractor shall not be considered an Eligible
Employee, and such designation or determination shall govern regardless of
whether such individual is ultimately determined to be an employee pursuant to
the Code or any other applicable law.
"EMPLOYMENT" shall mean, for purposes of determining whether a
termination of employment has occurred under the Plan, continuous and regular
salaried employment with the Company, a Subsidiary or an Affiliate, which shall
include (unless the Committee shall otherwise determine) any period of vacation,
any approved leave of absence or any salary continuation or severance pay period
and, at the discretion of the Committee, may include service with any former
Subsidiary or Affiliate of the Company. For this purpose, regular salaried
employment means scheduled employment of at least 20 hours per week.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"EXECUTIVE OFFICER" shall mean those persons who are officers of the
Company within the meaning of Rule 16a-1(f) of the Exchange Act.
"FAIR MARKET VALUE" shall mean on any date, with respect to a share of
Common Stock, the closing price of a share of Common Stock as reported by the
Consolidated Tape of 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.
"FUNDAMENTAL CORPORATE EVENT" shall mean any stock dividend,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares, offering to
purchase Common Stock at a price substantially below fair market value, or other
similar event.
"INCENTIVE STOCK" shall mean an Award of Common Stock granted under
Section 7 which may become vested and nonforfeitable upon the passage of time
and/or the attainment, in whole or in part, of performance objectives determined
by the Committee.
<PAGE> 3
"INCENTIVE STOCK OPTION" shall mean an Option which is intended to meet
the requirements of Section 422 of the Code.
"INCENTIVE UNIT" shall mean an Award of a contractual right granted under
Section 7 to receive Common Stock (or, at the discretion of the Committee, cash
based on the Fair Market Value of the Common Stock) which may become vested and
nonforfeitable upon either the passage of time and/or the attainment, in whole
or in part, of performance objectives determined by the Committee.
"NONSTATUTORY STOCK OPTION" shall mean an Option which is not intended to
be an Incentive Stock Option.
"OPTION" shall mean the right granted under Section 5 to purchase the
number of shares of Common Stock specified by the Committee, at a price and for
the term fixed by the Committee in accordance with the Plan and subject to any
other limitations and restrictions as this Plan and the Committee shall impose,
and shall include both Incentive Stock Options and Nonstatutory Stock Options.
"OTHER STOCK-BASED AWARD" shall mean any right granted under Section 8.
"PARTICIPANT" shall mean an Eligible Employee who is selected by the
Committee to receive an Award under the Plan and any recipient of a Substitute
Award as contemplated under Section 4.
"PLAN" shall mean the Aetna Inc. 1998 Stock Incentive Plan, described
herein, and as may be amended from time to time.
"RESTRICTED PERIOD" shall mean the period during which a grant of
Incentive Stock or Incentive Units is subject to forfeiture.
"STOCK APPRECIATION RIGHT" shall mean a right granted under Section 6.
"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.
SECTION 3. ADMINISTRATION.
The Plan shall be administered by the Committee. The Committee 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 Committee, 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 Participants and any person claiming
under or through any Participant.
<PAGE> 4
Subject to the terms of the Plan and applicable law, and in addition to
other express powers and authorizations conferred on the Committee by the Plan,
the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards, if any, to be granted
to an Eligible Employee; (iii) determine the number of shares of Common Stock to
be covered by, or with respect to which payments, rights, or other matters are
to be calculated in connection with, Awards; (iv) determine the terms and
conditions of any Award; (v) determine whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Common Stock, other
securities, other Awards or other property, or canceled, forfeited, or suspended
and the method or methods by which Awards may be settled, exercised, canceled,
forfeited, or suspended; (vi) determine whether, to what extent, and under what
circumstances, cash, Common Stock, other securities, other Awards, other
property, and other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the holder thereof or of the
Committee; (vii) interpret and administer the Plan and any instrument or
agreement relating to, or Award made under, the Plan; (viii) 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 (ix) make any
other determination and take any other action that the Committee deems necessary
or desirable for the administration of the Plan (including authorizing the Chief
Executive Officer of the Company to designate Participants or make Awards under
the Plan within limits prescribed by the Committee).
SECTION 4. SHARES AVAILABLE FOR AWARDS.
(a) Shares Available for Issuance. The maximum number of shares of Common
Stock in respect of which Awards may be made under the Plan shall be a total of
10,000,000 shares of Common Stock. Shares of Common Stock may be made available
from the authorized but unissued shares of the Company. In the event that any
Award is paid solely in cash, no shares shall be deducted from the number of
shares available for issuance by reason of such Award. Shares of Common Stock
subject to Awards that are forfeited, terminated, canceled or settled without
the delivery of Common Stock under the Plan will again be available for Awards
under the Plan, as will (A) shares of Common Stock tendered (either actually or
by attestation) to the Company in satisfaction or partial satisfaction of the
exercise price of any Award under the Plan and (B) shares of Common Stock
repurchased on the open market with remittances from the exercise of Options
granted under the Plan.
(b) Adjustment for Corporate Transactions. In the event that the
Committee 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 Committee may, in such manner as the Committee may deem
equitable, adjust any or all of (i) the number and kind of shares which
thereafter may be awarded or optioned and sold or made the subject of Awards
under the Plan, (ii) the number and kinds of shares subject to outstanding
Awards and (iii) the grant, exercise or conversion price with respect to any of
the foregoing. Additionally, the Committee may make provisions for a cash
payment to a Participant or a person who has an outstanding Award. However, the
number of shares subject to any Award shall always be a whole number.
<PAGE> 5
SECTION 5. STOCK OPTIONS.
(a) Grant. Subject to the provisions of the Plan, the Committee shall
have the authority to grant Options to an Eligible Employee and to determine (i)
the number of shares to be covered by each Option, (ii) subject to Section 5(b),
the exercise price of the Option and (iii) the conditions and limitations
applicable to the exercise of the Option. In the case of Incentive Stock
Options, the terms and conditions of such grants shall be subject to and comply
with Section 422 of the Code and the regulations thereunder.
(b) Exercise Price. Except in the case of Options granted in lieu of
payment for compensation earned by an Eligible Employee of the Company, the
exercise price of an Option shall not be less than 100% of the Fair Market Value
on the date of grant.
(c) Exercise. Each Option shall be exercised at such times and subject to
such terms and conditions as the Committee may specify at the time of the
applicable Award or thereafter. No shares shall be delivered pursuant to any
exercise of an Option unless arrangements satisfactory to the Committee have
been made to assure full payment of the exercise price therefor. Without
limiting the generality of the foregoing, payment of the exercise price may be
made in cash or its equivalent or, if and to the extent permitted by the
Committee, by exchanging shares of Common Stock owned by the optionee (which are
not the subject of any pledge or other security interest or which, in the case
of Incentive Stock, are fully vested) either actually or by attestation, or by a
combination of the foregoing, provided that the combined value of all cash and
cash equivalents and the Fair Market Value of any such Common Stock so tendered
to the Company, valued as of the date of such tender, is at least equal to such
exercise price.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) Grant of Stock Appreciation Rights. The Committee shall have the
authority to grant Stock Appreciation Rights in tandem with an Option, in
addition to an Option, or freestanding and unrelated to an Option. Stock
Appreciation Rights granted in tandem with an Option may be granted either at
the same time as the Option or at a later time.
(b) Exercise Price. The exercise price of an SAR shall not be less than
100% of the Fair Market Value of a share of Common Stock on the date the SAR was
granted; provided that if an SAR is granted retroactively in tandem with or in
substitution for an Option, the exercise price may be the exercise price of the
Option to which it is related.
(c) Exercise of Stock Appreciation Rights. A Stock Appreciation Right
shall entitle the Participant to receive from the Company an amount equal to the
excess of the Fair Market Value of a share of Common Stock on the date of
exercise of the Stock Appreciation Right over the base price thereof. The
Committee shall determine the time or times at which or the event or events
(including, without limitation, a change of control) upon which a Stock
Appreciation Right may be exercised in whole or in part, the method of exercise
and whether such Stock Appreciation Right shall be settled in cash, shares of
Common Stock or a combination of cash and shares of Common Stock; provided,
however, that unless otherwise specified by the Committee at or after grant, a
Stock Appreciation Right granted in tandem with an Option shall be exercisable
at the same time or times as the related Option is exercisable.
<PAGE> 6
SECTION 7. INCENTIVE AWARDS.
(a) Incentive Stock and Incentive Units. Subject to the provisions of the
Plan, the Committee shall have the authority to grant time vesting and/or
performance vesting Incentive Stock or Incentive Units to any Eligible Employee
and to determine (i) the number of shares of Incentive Stock and the number of
Incentive Units to be granted to each Participant and (ii) the other terms and
conditions of such Awards; provided that, to the extent necessary to comply with
applicable law, Incentive Stock shall only be awarded to an Eligible Employee
who has been employed for such minimum period of time as shall be determined by
the Committee. The Restricted Period related to Incentive Stock or Incentive
Units shall lapse upon the passage of time and/or the determination by the
Committee that the performance objectives established by the Committee have been
attained, in whole or in part.
(b) Certificates. Any certificates issued in respect of Incentive Stock
shall be registered in the name of the Participant and deposited by such
Participant, together with a stock power endorsed in blank, with the Company. At
the expiration of the Restricted Period with respect to any award of Incentive
Stock, unless otherwise forfeited, the Company shall deliver such certificates
to the Participant or to the Participant's legal representative. Payment for
Incentive Stock Units shall be made by the Company in shares of Common Stock,
cash or in any combination thereof, as determined by the Committee.
SECTION 8. OTHER STOCK-BASED AWARDS.
The Committee shall have authority to grant to eligible Employees an
"Other Stock-Based Award", which shall consist of any right which is (i) not an
Award described in Sections 5 through 7 above and (ii) an Award of Common Stock
or an Award denominated or payable in, valued in whole or in part by reference
to, or otherwise based on or related to, Common Stock (including, without
limitation, securities convertible into Common Stock), as deemed by the
Committee to be consistent with the purposes of the Plan. Subject to the terms
of the Plan and any applicable award agreement, the Committee shall determine
the terms and conditions of any such Other Stock-Based Award.
SECTION 9. DIVIDENDS AND DIVIDEND EQUIVALENTS.
The Committee may provide that any Award shall include dividends or
dividend equivalents, payable in cash, Common Stock, securities or other
property on a current or deferred basis, including payment contingencies.
SECTION 10. STOCK IN LIEU OF CASH.
The Committee may grant Awards in lieu of all or a portion of
compensation or an Award otherwise payable in cash to an Eligible Employee
pursuant to any bonus or incentive compensation plan of the Company.
If shares are issued in lieu of cash, the number of shares of Common
Stock to be issued shall be the greatest number of whole shares which has an
aggregate Fair Market Value on the date the cash would otherwise have been
payable pursuant to the terms of such other plan equal to or less than the
amount of such cash.
<PAGE> 7
SECTION 11. DEFERRAL.
The Committee shall have the discretion to determine whether, to what
extent, and under what circumstances cash, shares of Common Stock, other
securities, other Awards, other property, and other amounts payable with respect
to an Award shall be deferred either automatically or at the election of the
holder thereof or of the Committee.
SECTION 12. GENERAL PROVISIONS.
(a) Withholding. The Company shall have the right to deduct from all
amounts paid to a Participant in cash (whether under this Plan or otherwise) any
taxes required by law to be withheld in respect of Awards under this Plan. In
the case of any Award satisfied in the form of Common Stock, no shares shall be
issued unless and until arrangements satisfactory to the Company shall have been
made to satisfy any withholding tax obligations applicable with respect to such
Award. Without limiting the generality of the foregoing and subject to such
terms and conditions as the Committee may impose, the Company shall have the
right to retain, or the Committee may, subject to such terms and conditions as
it may establish from time to time, permit Participants to elect to use shares
of Common Stock (including Common Stock issuable in respect of an Award) to
satisfy, in whole or in part, the amount required to be withheld.
(b) Award Agreement. Each Award hereunder shall be evidenced in writing.
The written agreement shall be delivered to the Participant and shall
incorporate the terms of the Plan by reference and specify the terms and
conditions thereof and any rules applicable thereto.
(c) Nontransferability. Unless the Committee shall permit (on such terms
and conditions as it shall establish) an Award to be, transferred to a member of
the Participant's immediate family or to a trust or similar vehicle for the
benefit of such immediate family members (collectively, the "Permitted
Transferees"), no Award shall be assignable or transferable except by will or
the laws of descent and distribution, and except to the extent required by law,
no right or interest of any Participant shall be subject to any lien, obligation
or liability of the Participant. All rights with respect to Awards granted to a
Participant under the Plan shall be exercisable during the Participant's
lifetime only by such Participant or, if applicable, the Permitted Transferees
or the Participant's legal representative.
(d) No Right to Employment. No person shall have any claim or right to be
granted an Award, and the grant of an Award shall not be construed as giving a
Participant the right to be retained in the employ of the Company, any
Subsidiary or any Affiliate. Further, the Company and each Subsidiary and
Affiliate expressly reserves the right at any time to dismiss a Participant free
from any liability, or any claim under the Plan, except as provided herein or in
any agreement entered into with respect to an Award.
(e) No Rights to Awards, No Shareholder Rights. No Participant or
Eligible Employee shall have any claim to be granted any Award under the Plan,
and there is no obligation of uniformity of treatment of Participants and
Eligible Employees. Subject to the provisions of the Plan and the applicable
Award, no person shall have any rights as a shareholder with respect to any
shares of Common Stock to be issued under the Plan prior to the issuance
thereof.
<PAGE> 8
(f) Construction of the Plan. The validity, construction, interpretation,
administration and effect of the Plan and of its rules and regulations, and
rights relating to the Plan, shall be determined solely in accordance with the
laws of the State of Connecticut.
(g) Effective Date. December 4, 1998.
(h) Amendment or Termination of Plan. The Board or the Committee may
terminate or suspend the Plan at any time, but the termination or suspension
will not adversely affect any vested Awards then outstanding under the Plan. No
Award may be granted under the Plan after December 31, 2008 or such earlier date
as the Plan is terminated by action of the Board or the Committee. The Plan may
be amended or terminated at any time by the Board or the Committee. The
Committee may amend the term of any Award or Option granted, retroactively or
prospectively, but no amendment may adversely affect any vested Award or Option
without the holder's consent.
(i) Compliance with Legal and Exchange Requirements. The Plan, the
granting and exercising of Awards thereunder, and the other obligations of the
Company under the Plan, shall be subject to all applicable federal and state
laws, rules, and regulations, and to such approvals by any regulatory or
governmental agency as may be required. The Company, in its discretion, may
postpone the granting and exercising of Awards, the issuance or delivery of
Common Stock under any Award or any other action permitted under the Plan to
permit the Company, with reasonable diligence, to complete such stock exchange
listing or registration or qualification of such Common Stock or other required
action under any federal or state law, rule, or regulation and may require any
Participant to make such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of Common Stock
in compliance with applicable laws, rules, and regulations. The Company shall
not be obligated by virtue of any provision of the Plan to recognize the
exercise of any Award or to otherwise sell or issue Common Stock in violation of
any such laws, rules, or regulations; and any postponement of the exercise or
settlement of any Award under this provision shall not extend the term of such
Awards, and neither the Company nor its directors or officers shall have any
obligations or liability to the Participant with respect to any Award (or stock
issuable thereunder) that shall lapse because of such postponement.
(j) Severability of Provisions. If any provision of this Plan shall be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and this Plan shall be construed and
enforced as if such provision had not been included.
(k) Incapacity. Any benefit payable to or for the benefit of a minor, an
incompetent person or other person incapable of receipting therefor shall be
deemed paid when paid to such person's guardian or to the party providing or
reasonably appearing to provide for the care of such person, and such payment
shall fully discharge any liability or obligation of the Committee, the Board,
the Company and all other parties with respect thereto.
(l) Headings and Captions. The headings and captions herein are provided
for reference and convenience only, shall not be considered part of this Plan,
and shall not be employed in the construction of this Plan.
<PAGE> 1
Exhibit 5.1
(LETTERHEAD)
December 14, 1998
Aetna Inc.
151 Farmington Avenue
Hartford, CT 06156
Dear Ladies and Gentlemen:
I have acted as counsel to Aetna Inc., a Connecticut corporation (the
"Company"), in connection with a Registration Statement on Form S-8 ("the
Registration Statement"), to be filed by the Company with the Securities and
Exchange Commission. The Registration Statement relates to shares (the "Common
Shares") of the Company's Common Stock, par value $.01 per share (the "Common
Stock"), to be issued pursuant to the Aetna Inc. 1998 Stock Incentive Plan (the
"Plan"), preferred stock purchase rights (the "Rights") to be issued with the
Common Shares pursuant to a Rights Agreement dated as of July 19, 1996 (the
"Rights Agreement") between the Company and First Chicago Trust Company of New
York, as Rights Agent, and such presently indeterminate number of shares of
Common Stock which may be offered and issued to prevent dilution resulting from
stock splits, stock dividends or similar transactions.
I have examined or caused to be examined originals, or copies of such corporate
records, certificates and other documents, and have considered such questions of
law, as I have deemed necessary or appropriate for the purposes of this opinion.
For purposes of this opinion I have assumed that the Board of Directors of the
Company, after fully informing itself with respect to the Rights Agreement and
the Rights and after giving due consideration to all relevant matters,
determined that the execution and delivery of the Rights Agreement and the
issuance of the Rights thereunder would be in the best interests of the Company
and its shareholders, that such action by the Board of Directors was not
contrary to its fiduciary obligations and that the Rights Agreement was duly
authorized, executed and delivered by the Rights Agent. The opinion set forth
below with respect to the Rights is limited to the authorization of the Rights
Agreement by the Board and the issue of Rights pursuant to the Rights Agreement,
and does not extend to any subsequent action or inaction by the Board with
respect to the Rights Agreement, including any decision relating to redemption
of the Rights or amendment of the Rights Agreement, which would need to be
evaluated in light of all relevant facts, circumstances and legal precedents
applicable at that time.
With respect to the Rights, the Connecticut Business Corporation Act (the
"Act") provides a board of directors with broad authority to issue or grant
rights or options entitling the holders thereof to purchase from the
corporation authorized shares on such terms and at such times as the board of
directors may determine. Section 33-666(c) of the Act provides that shares are
not of the same class unless they are identical except as to specified
variations among different series in the class.
A number of courts construing similar provisions of the corporation laws of
states other than Connecticut have upheld the issuance of rights substantially
similar to the Rights. On the other hand, a number of courts construing similar
provisions of the corporation laws of other states have invalidated rights
similar to the Rights on the basis that the provisions pursuant to which rights
held by certain persons could become void violated the requirements that shares
of the same class and series be identical. Courts sustaining the issuance of
rights have distinguished between discrimination among shares and
discrimination among shareholders, and determined that the relevant statutory
authority does not prohibit the latter form of discrimination. The Act requires
in effect that all shares of the same class be identical, with specified
exceptions. However, the Act does not say whether this requirement applies to
provisions of rights that have been issued in respect of shares of a particular
class or to shareholders or holders of rights who take specified actions
resulting in those rights become void. Although there is no published judicial
decision interpreting Section 33-666 or other provisions of the Act in the
context of the issuance of rights similar to the Rights, the official
commentary to section 33-666 specifically states that section 33-666(c) is not
intended to affect the validity or enforceability of shareholder rights plan or
similar plans. This would be persuasive to a court faced with a case
questioning the validity of the Rights.
Based upon and subject to the foregoing, I am of the opinion that:
1. the Common Shares, when issued in accordance with the terms of the Plan,
will be validly issued, fully paid and non-assessable; and
<PAGE> 2
2. although there is no Connecticut case law or express statutory provision
dispositive of the issue and the matter thus is not entirely free from doubt,
the Rights, when issued in accordance with the terms of the Plan and the Rights
Agreement, will be validly issued.
I am admitted to the Bar of the State of Connecticut. The foregoing opinion is
limited to the federal laws of the United States and the laws of the State of
Connecticut.
In my examination or the examination which I caused to be made, the legal
capacity of all natural persons, the genuineness of all signatures, the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as certified or photostatic
copies and the authenticity of the originals of such latter documents were
assumed. As to any facts material to the opinions expressed herein which were
not independently established or verified, I have relied upon oral or written
statements and representations of officers and other representatives of the
Company and others.
I hereby consent to the inclusion of this opinion as an exhibit to the
Registration Statement. In giving such consent, I do not thereby admit that I am
in the category of persons whose consent is required under Section 7 of the
Securities Act.
Very truly yours,
/s/ Judith H. Jones
- -----------------------
Judith H. Jones
Counsel, Aetna Inc.
<PAGE> 1
Exhibit 15.1
LETTER RE: UNAUDITED INTERIM FINANCIAL INFORMATION
Aetna Inc.
Hartford, Connecticut
Ladies and Gentlemen:
With respect to the registration statement filed on Form S-8 by Aetna Inc. and
its Subsidiaries, we acknowledge our awareness of the use therein of our reports
dated May 5, 1998, August 4, 1998 and November 3, 1998 related to our reviews of
interim financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such reports are not
considered a part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the meaning
of sections 7 and 11 of the Act.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
December 14, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Aetna Inc.
We consent to incorporation by reference in the registration statement on Form
S-8 of Aetna Inc. and Subsidiaries of our audit report dated February 3, 1998,
relating to the consolidated balance sheets of Aetna Inc. and Subsidiaries as of
December 31, 1997, and 1996, and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1997, which is incorporated by reference in the
December 31, 1997 annual report on Form 10-K of Aetna Inc., and of our report
dated February 3, 1998, relating to the related schedules, which report appears
in the December 31, 1997, annual report on Form 10-K of Aetna Inc.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
December 14, 1998
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
We, the undersigned directors and/or officers of Aetna, Inc. (the "Company"),
hereby severally constitute and appoint Michele G. Kostin, Counsel, and Judith
H. Jones, Counsel, and each of them individually, with full powers of
substitution and resubstitution, our true and lawful attorneys, with full power
to them and each of them to sign for us, in our names and in the capacities
indicated below, the Registration Statement on Form S-8 to be filed with the
Securities and Exchange Commission, and any and all amendments to said
Registration Statement (including post-effective amendments), in connection with
the registration under the Securities Act of 1933, as amended, of up to
10,000,000 shares of Common Stock of the Company under the Company's 1998 Stock
Incentive Plan, and to file or cause to be filed the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as each of them might or could do in person, hereby ratifying and
confirming all that said attorneys, and each of them, or their substitute or
substitutes, shall do or cause to be done by virtue of this Power of Attorney.
WITNESS our hands on this 4th day of December, 1998.
<TABLE>
<S> <C>
/s/ Richard L. Huber /s/ Gerald Greenwald
------------------------------------------- ------------------------------------------
Richard L. Huber, Chairman, Chief Gerald Greenwald, Director
Executive Officer, President and Director
(Principal Executive Officer)
/s/ Leonard Abramson /s/ Ellen M. Hancock
------------------------------------------- ------------------------------------------
Leonard Abramson, Director Ellen M. Hancock, Director
/s/ Betsy Z. Cohen /s/ Michael H. Jordan
------------------------------------------- ------------------------------------------
Betsy Z. Cohen, Director Michael H. Jordan, Director
/s/ William H. Donaldson /s/ Jack D. Kuehler
------------------------------------------- ------------------------------------------
William H. Donaldson, Director Jack D. Kuehler, Director
/s/ Barbara Hackman Franklin /s/ Frank R. O'Keefe, Jr.
------------------------------------------- ------------------------------------------
Barbara Hackman Franklin, Director Frank R. O'Keefe, Jr., Director
/s/ Jerome S. Goodman /s/ Judith Rodin
------------------------------------------- ------------------------------------------
Jerome S. Goodman, Director Judith Rodin, Director
/s/ Earl G. Graves /s/ Alan J. Weber
------------------------------------------- ------------------------------------------
Earl G. Graves, Director Alan J. Weber, Vice Chairman for Strategy
and Finance (Principal Financial Officer)
/s/ Alan M. Bennett
------------------------------------------
Alan M. Bennett, Vice President, Finance
and Corporate Controller
(Principal Accounting Officer)
</TABLE>
