Aetna 2013 Annual Report Download - page 98

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Annual Report- Page 92
The components of consideration transferred for the acquisition of Coventry were as follows:
(Certain amounts may reflect rounding adjustments)
Conversion Form of
(Millions, except per common share data) Calculation Fair Value Consideration
Consideration Transferred:
Number of shares of Coventry common stock outstanding at May 7, 2013: 133.7
Multiplied by Aetna's share price at May 7, 2013, multiplied by the Aetna
exchange ratio ($58.69*0.3885) $ 22.80 $ 3,047.4 Common Shares
Multiplied by the per common share cash consideration $ 27.30 $ 3,648.7 Cash
Number of shares underlying in-the-money Coventry stock options vested and unvested
outstanding as of May 7, 2013, canceled and exchanged for cash 4.9
Multiplied by the excess, if any, of (1) the sum of (x) the per
common share cash consideration plus (y) the Aetna closing share price (1)
multiplied by the exchange ratio ($57.93*0.3885) over
(2) the weighted-average exercise price of such
in-the-money stock options $ 15.94 $ 78.1 Cash
Number of Coventry performance share units and restricted stock
units outstanding at May 7, 2013, canceled and paid in cash 1.6
Multiplied by the equity award cash consideration $ 49.8 $ 58.5 Cash (2)
Number of Coventry restricted shares outstanding at May 7, 2013: 1.1
Less: employee tax withholdings (.4) $ 18.8 Cash
Net restricted shares outstanding at May 7, 2013 .7
Multiplied by Aetna's share price at May 7, 2013, multiplied by Aetna
the exchange ratio ($58.69*0.3885) $ 22.80 $ 17.20 Common Shares
Multiplied by the per common share cash consideration $ 27.30 $ 20.50 Cash
Other consideration transferred (3) 6.9
Total consideration transferred $ 6,896.1
(1) Based on the average of the volume weighted averages of the trading prices of Aetna common shares on the New York Stock Exchange
for each of the five consecutive trading days ending on the trading day that was two trading days prior to the Effective Date.
(2) Pursuant to the terms of certain employment agreements, an aggregate of approximately .5 million performance share units and
restricted stock units did not automatically vest upon the change of control of Coventry. In the absence of such automatic vesting upon
a change in control, pursuant to GAAP, Aetna estimated the fair value of these awards at the Effective Date and attributed that fair
value to pre-Merger and post-Merger services. Accordingly, $6.9 million of the fair value of these awards was attributed to pre-Merger
services and is included in the estimated consideration transferred, and approximately $19.0 million has been accounted for in Aetna's
post-Merger financial statements as transaction-related costs and reflected as a selling, general and administrative expense in Aetna's
statements of income.
(3) Certain of Coventry's named executive officers received payments pursuant to employment agreements entered into prior to the
Coventry acquisition. The total compensation paid in cash pursuant to such agreements in connection with the Merger was $6.5
million. Other consideration transferred also includes the portion of the fair value of the Rollover Units that was attributed to pre-
Merger services. The fair value of the Rollover Units attributable to post-Merger services has been recorded as selling, general and
administrative expense in Aetna's post-Merger financial statements.