Aetna 2013 Annual Report Download - page 127

Annual Report- Page 121
At December 31, 2013, approximately 34 million shares of our common stock were reserved for issuance under the
Aetna 401(k) Plan.
12. Stock-based Employee Incentive Plans
Our stock-based employee compensation plans (collectively, the “Plans”) provide for awards of stock options,
SARs, PSARs, restricted stock units (“RSUs”), MSUs, PSUs, deferred contingent common stock and the ability
for employees to purchase common stock at a discount. At December 31, 2013, approximately 34 million
common shares were available for issuance under the Plans. Executive, middle management and non-
management employees may be granted RSUs, MSUs, PSUs, stock options, SARs and PSARs, each of which are
described below:
RSUs - For each RSU granted, employees receive one share of common stock, net of taxes, at the end of
the vesting period. RSUs generally become 100% vested approximately three years from the grant date,
with one-third vesting each December.
MSUs - The number of vested MSUs (which could range from zero to 150% of the original number of units
granted) is dependent on the weighted average closing price of our common stock for the thirty trading days
prior to the vesting date, including the vesting date. Each vested MSU represents one share of common
stock and will be paid in shares of common stock, net of taxes. MSUs granted in 2011 were subject to a 22
month vesting period. MSUs representing 50% of the grant date fair value of the MSUs granted in 2012
were subject to a two-year vesting period while the remaining MSUs granted in 2012 are subject to a three-
year vesting period. MSUs granted in 2013 are subject to a three-year vesting period.
PSUs - The number of vested PSUs (which could range from zero to 200% of the original number of units
granted) is dependent upon the degree to which we achieve performance goals, which for the most part, are
set at the time of grant as determined by our Board's Committee on Compensation and Talent Management
(the “Compensation Committee”). Each vested PSU represents one share of common stock and will be
paid in shares of common stock, net of taxes. Below is a summary of the performance period and vesting
percentages for each tranche of PSUs granted by the Company:
PSUs granted in 2011 (“2011 PSUs”)
The one-year performance period for the 2011 PSUs ended on December 31, 2011. The 2011 PSUs
were subject to a 22 month vesting period and vested at 200% of the original number of units granted.
PSUs granted in 2012 (“2012 PSUs”)
Half of the 2012 PSUs were subject to a one-year performance period that ended on December 31,
2012, and vested at 81.67% of the original number of units granted. The remaining half were subject to
a one-year performance period that ended December 31, 2013, and vested at 119.12% of the original
number of units granted. The 2012 PSUs were subject a two-year vesting period.
PSUs granted in 2013 (“2013 PSUs”)
Certain PSUs granted in 2013 are subject to a single three year performance period that will end on
December 31, 2015, and are subject to a single vesting period that ends on January 5, 2016.
Half of the remaining 2013 PSUs were subject to a one-year performance period that ended on
December 31, 2013, and the other half of the remaining 2013 PSUs are subject to a one-year
performance period that will end on December 31, 2014. The 2013 PSUs that were subject to a one-
year performance period will vest at 127.08% of the original number of units granted.
Stock Options and SARs - We have not granted stock options since 2005, but some remain outstanding.
Stock options were granted to purchase our common stock at or above the market price on the date of grant.
SARs granted will be settled in stock, net of taxes, based on the appreciation of our stock price on the
exercise date over the market price on the date of grant. SARs and stock options generally become 100%