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Employment Agreement - Aetna Inc. and Daniel P. Kearney

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
     30, 1998.

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)

Page 2
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 Inc.
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
     __________________________        ___________________________
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