CIGNA 8k
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
Report (Date of earliest event reported) September
28, 2006
CIGNA
Corporation
(Exact
name of registrant as specified in its charter)
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Delaware
(State
or other jurisdiction of incorporation)
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1-08323
(Commission
File Number)
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06-1059331
(IRS
Employer
Identification
No.)
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Two
Liberty Place, 1601 Chestnut Street
Philadelphia,
Pennsylvania 19192
(Address
of principal executive offices) (Zip Code)
Registrant's
telephone number, including area code
(215)
761-1000
Not
Applicable
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
[
]
Pre-commencement communication pursuant to Rule 13e-49(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Item
2.03. Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
On
September 28, 2006, Connecticut General Life Insurance Company, (“CGLIC”), an
indirectly wholly owned subsidiary of CIGNA Corporation, entered into a Master
Services Agreement (the “Master Agreement”) with International Business Services
Corporation (“IBM”), which sets forth the general terms and conditions that are
applicable to specific Statements of Work to be entered into by the parties
for
the provision of technology infrastructure and related services to CGLIC and
certain CGLIC affiliates and related entities (“CIGNA”). The Statements of Work
describe the particular services to be performed by IBM, as well as the
performance standards, fees and other provisions applicable to the particular
services. The financial obligations of the company arise under the individual
Statements of Work.
On
the
same day, CGLIC entered into five Statements of Work with IBM that cover
services relating to CIGNA’s contact center application (“CCA”), enterprise
content management (“ECM”), risk-based capital infrastructure (“RBC”), voice and
data communications and network (“Network”) and information technology strategy
(“IT Strategy”) (collectively, the “Initial Statements of Work”). The Statements
of Work for CCA, ECM, Network and IT strategy are effective as of October 1,
2006 and the Statement of Work for RBC is effective as of September 19, 2006.
The
term
of each of the Initial Statements of Work is generally seven years from the
effective date of the Statement of Work, and such term is renewable by the
company for up to two additional years, unless otherwise terminated by a party
in accordance with the terms of the Master Agreement or the applicable Statement
of Work. The company has the right to terminate for convenience the Master
Agreement, as well as the individual Statements of Work, upon 90 days notice
and
payment of a termination fee.
The
company will pay IBM for the services performed under the Initial Statements
of
Work under a combination of fixed and variable charges, with variable charges
fluctuating based on CIGNA’s actual consumption of certain services measured on
a usage basis. Certain payment minimums apply, which generally range from 40%
to
80% of the annual services charge specified in the applicable Statement of
Work,
with reduced payment minimums in the event of the occurrence of certain business
events. The total value of the Initial Statements of Work, payable over seven
years, is $723.5 million, of which $609.4 million is deemed to be a direct
financial obligation of the company.
The
Master Agreement also provides for confidentiality, data security and
indemnification, the terms of which are customary for agreements of the same
type as the Master Agreement. Except in certain specified circumstances, each
party’s total potential liability arising out of or related to this Master
Agreement is subject to an agreed upon maximum amount.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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CIGNA
CORPORATION
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Date:
October 4, 2006
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By:
/s/ Michael
W. Bell
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Michael
W. Bell
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Executive
Vice President and
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Chief
Financial Officer
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