AEtna Interoffice Communication
Richard L. Huber
CEO and President
To Daniel P. Kearney
Date September 8, 1997
Subject Employment Agreement
This memorandum is intended to modify that certain Employment
Agreement dated as of December 19, 1995 by and among Aetna
Services, Inc. (formerly Aetna Life and Casualty Company), Aetna
Inc. (by assumption) and you.
1. As of August 18, 1997, you will no longer serve as Executive
Vice President, I&FS. You agree to continue working,
reporting to me on: (i) structuring and implementing a
possible real estate investment trust or securitization
transaction; and (ii) retained responsibilities as chief
investment officer until a replacement is named, but with
respect to both areas, no later than February 28, 1998. At
that time you will retire from Aetna, however, you may
subsequently elect when you will begin receiving retirement
2. In lieu of eligibility for the payment of the Severance
Benefit as defined in the Employment Agreement or any other
severance or salary continuation benefit to which you would
otherwise be eligible, you will be paid beginning August 18,
1997 an amount equivalent to the amount calculated pursuant
to the third definition in Section 6(d) of the Employment
Agreement using August 18, 1997 as the end date of the
Contract Employment Period, such payment conditioned upon
delivery to the Company of an executed copy of a document in
the form of Exhibit B to the Employment Agreement. Upon such
delivery, Section 8(a) of the Employment Agreement will no
longer be applicable.
3. In lieu of any annual bonus for the performance year 1997,
you will be paid a one-time guaranteed payment equal to your
pro rata target bonus for the period January 1st through
August 18th. This payment will be made on or about January
4. You will vest to the remainder of your performance stock
options as scheduled on April 28, 1998.
5. You will remain eligible to vest to a pro rata share of your
second cycle and third cycle ACEShares awards based on the
period of your active employment at the completion of the
respective performance cycles to the extent performance
criteria are satisfied.
Exhibit 10.2 (Continued)
Daniel P. Kearney
September 8, 1997
6. In the event a real estate investment trust or securitization
transaction which results in removal of approximately $1.5
billion of assets from Aetna's books is consummated by February
28, 1998, you will be paid immediately following the closing:
(i) a closing fee of $300,000 and (ii) to the extent the sale
price is above par value, as mutually determined, a success
fee of an additional amount scaled not to exceed $450,000.
It is understood that, should a real estate investment trust
or securitization transaction take place with you as an
executive of the new entity, it may be appropriate for the
new entity to employ certain Aetna employees. We will agree
to work together to identify any employees to be employed by
the new entity and agree that activity will not constitute a
violation of Paragraph 8(b) of the Employment Agreement.
7. Pension and other benefits to operate on a basis equivalent
to what would have been received under the terms of the
Employment Agreement. For purposes of eligibility for the
Company retiree medical benefits, you will be treated on the
same basis as other Aetna employees who retire or otherwise
terminate active employment as of August 18, 1997.
Except as revised in this memorandum the Employment Agreement
shall remain in full force and effect.
Aetna Services, Inc.
By: /s/ Richard L. Huber /s/ Daniel P. Kearney
Richard L. Huber Daniel P. Kearney
Date: 9-8-97 9/16/97