Filed by AETNA Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: AETNA Inc.
Commission File No. 001-11913
Questions and Answers for Employees
Sale to ING -
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Why didn't Aetna split into two independently traded companies?
All along, we've said that our goal is to deliver shareholder value, and
we've also said that we would review any legitimate proposal that may
enhance value. This is an attractive offer that we think makes sense for
our shareholders and is also in the interests of our other constituents.
What will happen to AFS management?
AFS management and all AFS and AII employees will be employed by ING at
closing.
Tom McInerney will take on the role of CEO of U.S. Worksite Business for
ING Americas. This will include Aetna Financial Services' health,
education, government and corporate business units, as well as the
education and corporate operations and the worksite marketing operations
of ReliaStar. The U.S. Worksite Business will be headquartered in
Hartford.
The AFS individual annuity business and Financial Network Investment
Corporation will become part of the ING Americas U.S. Retail Business
operation, which is to be headed by Bob Salipante, COO and president of
ReliaStar, which also is being purchased by ING. Aeltus will continue to
report to John Kim. He will be president and CEO of Aeltus, as well as
ING-branded retail mutual funds.
Where will the financial services business be headquartered?
ING has committed to maintain company operations in Hartford. The Tower
building that AFS now occupies will be leased to ING at market rate for
seven years.
Will the financial services business continue to operate under the Aetna name?
The financial services business will operate under the Aetna name for a
three-year interim period. After the first 18 months, ING may use the name
only in conjunction with an ING brand (e.g., "ING/Aetna").
How many employees will be transferred to ING as a result of the transaction?
All employees of AFS and AII as of closing, plus up to approximately 200
corporate employees. The majority of the corporate employees to be
transferred will be in IT, and perhaps other necessary support services
over time. A smaller group will be in the areas of audit, controllers and
tax.
Will there be layoffs in financial services and international?
This transaction is not about layoffs. Of course, ING will determine
appropriate staffing levels for all of its businesses, not just the AFS
and AII acquisition. But ING has committed to having a significant
presence in Hartford. ING has agreed to keep a severance program for AFS
and U.S.-based AII employees equivalent to Aetna's in effect for at least
two years from the closing date. And ING has agreed to provide for at
least one year benefits to AFS employees, which, in the aggregate, are
comparable to the current Aetna benefits.
When will employees know if they are going to lose their jobs?
Any employees who are affected will be notified in a timely manner once
decisions are made.
New health company -
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Wherewill the health company be headquartered?
The health company will be headquartered in Hartford.
What will happen to Blue Bell and Middletown?
Aetna will continue to have major facilities in Blue Bell and Middletown.
Will the health company continue to use the Aetna name?
The new health company will be named Aetna Inc., and will have full rights
to use the Aetna name in connection with its current businesses and
operations.
Will Aetna change its logo?
Decisions on brand positioning and corporate identity issues will be
announced later.
What Hartford-area properties will the health company keep?
The health company will keep the Rogers building (151 Farmington Avenue),
as well as the Middletown (Aetna leases) and Windsor (Aetna owns)
properties. In addition, the health company will continue to own State
House Square (which houses Aeltus), but will lease part of it to ING. The
health company will continue to own the Hartford Civic Center Mall.
What happens to CityPlace?
ING will assume the master lease on CityPlace.
Won't the health company need far fewer corporate employees than at present?
Some jobs may be affected, but it is too soon to know how many. The
company hopes to rely largely on attrition. The health company still will
need functions that currently exist at the corporate level (e.g., human
resources, finance, corporate governance, compliance, SEC reporting,
investor and public relations, etc.).
Employee and benefits questions -
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Does the close of the sale trigger a change in control?
Yes.
What happens to employee stock options once the sale is completed?
All the unvested options will vest. The Board's Committee on Compensation
and Organization will adjust the options to reflect the sale. The value of
stock options will be paid in cash or in new options in the health
company.
What happens to bonuses?
Management intends to fund the annual bonus pool at least at target
performance level for this year. As always, awards on an individual basis
will be made based upon performance evaluations. Compensation decisions
ultimately will be made by the Board's Committee on Compensation and
Organization.
What about Aetna's retirees - will they stay with the health business or go
with AFS?
The health business will retain all retirees. Only active AFS and AII
employees will go to ING.
Questions impacting AFS/All employees -
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Will severance packages be offered to AFS and U.S.-based AII employees who are
laid off?
Yes. Severance packages will be offered to U.S. employees. ING has agreed
to provide any affected financial services or international employees
(within two years) the current Aetna job elimination severance program. If
any other (corporate) employees are affected, they of course would qualify
for Aetna severance. (Aetna has previously announced its job elimination
severance program.)
How will these transactions affect AFS and AII employees' holdings in the
401(k) plan?
As of closing, unvested 401(k) balances of AFS and U.S.-based AII
employees transferring to ING will be vested. After the closing, the
401(k) balances of AFS and AII employees will be transferred to an ING
401(k) plan.
What happens to bonuses for AFS, All and corporate employees who go to ING?
The annual bonus program, including performance goals and funding
arrangements still is in place. If the sale closes this year, management
intends to fund the annual bonus pool for performance at least at target
level.
What happens to the pension benefits for AFS and AII employees?
Liabilities of the pension plan of AFS and AII active employees (and
related assets) will be transferred to an ING pension plan. ING will be
responsible for administering the ING pension plan for AFS employees after
the closing. Employees will receive credit for their service at Aetna
under the ING plan.
What happens to those eligible for retiree medical coverage?
Active employees in AFS and AII eligible for retiree medical at the
closing will be eligible to elect retiree medical health coverage from the
health business. Employees not eligible for retiree medical health as of
the closing will participate in the ING retiree medical plan.
When will we hear more in detail about benefits?
ING and Aetna will coordinate to provide a regular update on benefits for
affected employees.
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Aetna will be filing a proxy statement and other relevant documents concerning
the merger with the United States Securities and Exchange Commission (the
"SEC"). WE URGE INVESTORS TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT
DOCUMENTS TO BE FILED WITH THE SEC, BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
Investors will be able to obtain the documents free of charge at the SEC's Web
site, http://www.sec.gov. In addition, documents filed with the SEC by Aetna
will be available free of charge by calling 1-800-237-4273. Documents filed
with the SEC by ING will be available free of charge from the Investor
Relations Department, Strawinskylaan 2631.1077 ZZ Amsterdam, P.O. Box 810, 1000
AV. Amsterdam, The Netherlands 31-20-541-5462.
PLEASE READ THE PROXY STATEMENT CAREFULLY BEFORE
MAKING A DECISION CONCERNING THE MERGER.
This document does not constitute a solicitation by Aetna or its board of
directors of any approval or action of its shareholders.
Aetna and its board of directors will be soliciting proxies from Aetna
stockholders in favor of the merger. You can obtain more information about
Aetna's directors and officers and their beneficial interests in Aetna's common
stock from the SEC's Web site, http://www.sec.gov, and Aetna's Web site,
http://www.aetna.com. Updated information with respect to the security holdings
of these individuals will be included in the final proxy statement to be filed
with the SEC.
CAUTIONARY STATEMENT -- Certain information in this document concerning the
transaction with ING is forward-looking, including statements regarding the
amount of cash per share that Aetna's shareholders are projected to receive
from the transaction, the tax-efficient nature of the transaction, and Aetna's
expectation as to the closing date of the ING transaction. Certain information
in this document concerning Aetna's health business is also forward-looking,
including the future business prospects for Aetna's health business and Aetna's
expectations as to the future impact of certain actions and plans Aetna intends
to implement in its health business. Forward-looking information is based on
management's estimates, assumptions and projections, and is subject to
significant uncertainties, many of which are beyond Aetna's control. Important
risk factors could cause the actual future results to differ materially from
those currently estimated by management. Risk factors that could materially
affect statements made concerning the ING transaction include, but are not
limited to: the capitalization of Aetna on the closing date, including the
number of shares outstanding at that time; the timely receipt of necessary
shareholder, regulatory and other consents and approvals needed to complete the
transaction, which could be delayed for a variety of reasons related or not
related to the transaction itself; the fulfillment of all of the closing
conditions specified in the transaction documents; and the results of, and
credit ratings assigned to, Aetna's health business at and prior to the closing
of the ING transaction. Risk factors that could materially affect statements
made concerning the results of Aetna's health business include, but are not
limited to: continued or further unanticipated increases in medical costs
(including increased medical utilization, increased pharmacy costs, increases
resulting from unfavorable changes in contracting or recontracting with
providers, changes in membership mix to lower premium or higher cost products
or membership adverse selection); the ability to successfully integrate the
Prudential HealthCare transaction on a timely basis and in a cost-efficient
manner and to achieve projected operating earnings targets for that acquisition
(which also is affected by the ability to retain acquired membership and the
ability to eliminate duplicative administrative functions and integrate
management information systems); adverse government regulation (including
legislative proposals to eliminate or reduce ERISA pre-emption of state laws
that would increase potential litigation exposure, other proposals that would
increase potential litigation exposure or proposals that would mandate coverage
of certain health benefits); and the outcome of litigation and regulatory
matters, including numerous purported health care actions and ongoing reviews
of business practices by various regulatory agencies. For further discussion of
important risk factors that may materially affect management's estimates,
Aetna's results and the forward-looking statements herein, please see the risk
factors contained in Aetna's Securities and Exchange Commission filings, which
risk factors are incorporated herein by reference. You also should read those
filings, particularly Aetna's 1999 Report on Form 10-K and Report on Form 10-Q
for the period ended March 31, 2000 filed with the SEC, for a discussion of
Aetna's results of operations and financial condition.
