July 19, 1996
1. Do I have to surrender my stock certificates?
Aetna shareholders are not required to surrender their
share certificates in exchange for Aetna Inc. share
certificates. Following the merger, your Aetna Life and
Casualty Company certificates automatically will be
deemed to represent an equal number of shares of Aetna
Inc. Common Stock.
2. What are the Parent Rights?
The Aetna Inc. Rights Plan is intended to provide
protection against abusive or coercive takeover tactics
and takeover bids that do not fully reflect the value of
the Company or that are otherwise not in the best
interests of the Company's shareholders or other relevant
constituencies. It will operate just like the Rights Plan
currently in effect for Aetna Life and Casualty Company.
Until the Rights become exercisable, your Aetna Inc.
Common Stock certificates will represent the Rights.
3. Is the exchange of shares of Aetna Life and
Casualty Company stock for shares of Aetna Inc. stock
taxable?
Aetna shareholders will not recognize income, gain or
loss on the exchange of their Aetna Life and Casualty
Company shares for Aetna Inc. shares. The shareholder's
tax basis of Aetna Inc. shares received in the exchange
will be equal to the tax basis of the Aetna Life and
Casualty Company shares formerly held. The shareholder's
holding period will include the period the shareholder
held Aetna Life and Casualty Company shares. The holding
period is used to qualify for long-term capital gains
treatment on the sale of the Aetna Inc. shares.
4. How many shares of Aetna Inc. Common Stock will
be outstanding following the merger?
Approximately 150,000,000 shares not including
conversion of Aetna preferred stock or exercise of
outstanding stock options.
5. Will the convertible preferred be
exchange-listed?
Yes, the Aetna Inc. 6.25% Class C Voting Preferred
Stock will be listed on the New York Stock Exchange after
the close the merger.
6. What are the terms of the 6.25% Class C Voting
Preferred Stock?
The dividend yield is 6.25%, equal to $4.7578 per
share of Preferred Stock. The conversion premium is 22%
of $76.125 or $92.87. The stock is manditorily
convertible four years after issuance into one share of
Aetna Inc. Common Stock plus accrued and unpaid
dividends. Conversion is at the option of the holder, at
any time for 0.8197 share of common stock per share of
manditorily convertible preferred stock. The preferred is
callable by Aetna after three years.
7. What is Aetna going to look like after the
merger?
The proposed merger of Aetna and U.S. Healthcare will
result in a newly established holding company, Aetna
Inc., which will conduct its business through two
wholly-owned subsidiaries, Aetna Life and Casualty
Company (to be renamed Aetna Services, Inc.), and U.S.
Healthcare, Inc.

8. How do U.S. Healthcare shareholders exchange their
shares?
Promptly after the merger date, transmittal forms will
be mailed to each holder of record of U.S. Healthcare
stock. Shareholders should use their forms when they
forward their certificates for surrender and exchange to
the Exchange Agent. U.S. Shareholders should not
surrender their share certificates until they receive a
transmittal form.
9. Will I receive fractional shares of Aetna Inc.?
No. U.S. Healthcare shareholders will receive only
whole shares of Aetna Inc. common and Class C Voting
Preferred Stock. They will receive cash in lieu of
fractional shares.
10. I'm a U.S. Healthcare shareholder. Will I be
entitled to the Aetna Inc. dividend that was just
declared.
Yes. U.S. Healthcare shareholders will receive the
declared dividends for whole shares of Aetna Inc. common
and Class C Voting Preferred Stock when they surrender
their shares.
11. What will the new health plan be called?
At present, the products of Aetna Health Plans and US
Healthcare will be marketed separately. The long-term
branding identity for the combined entity is being
crafted.
AETNA INC. FACT SHEET
| Principal
Subsidiaries: |
Aetna Life and
Casualty Company
U.S. Healthcare, Inc. |
| Corporate
Headquarters: |
Hartford, Connecticut |
| Stock Ownership*: |
Aetna Shareholders
U.S. Healthcare |
72%
28%
------
100%
==== |
*Each share of U.S. Healthcare stock will be exchanged
for $34.20 in cash, 0.2246 Aetna Common Stock and 0.0749
Aetna Class C Voting Preferred Stock.
- Key Businesses:
-
- Healthcare:
- Combined, Aetna/U.S. Healthcare will provide
health care services to 23 million people, or one
in every 12 Americans. With 10.3 million members,
the combined health plans will be the country's
leading provider of managed health care benefits.
Key Facts:
| |
|
Aetna |
U.S Healthcare |
Combined |
| Health
Members (millions) |
| |
Managed Care
IndemnityTotal Health
|
7.5
3.8
-----
11.3 |
2.8
0.0
-----
2.8 |
10.3
3.8
-----
14.1 |
Health Network |
| |
Physicians
Hospitals |
202,000
2,225 |
54,000
441 |
256,000
2,666 |

- Retirement Services
- Aetna Retirement Services serves 1.5 million
customers directly and through nearly 20,000 plan
sponsors;
- had assets under management of $26.4 billion,
including $12.5 billion in variable and mutual
fund assets at March 31, 1996;
- is among the top 2% of all U.S. life insurance
companies ranked by total assets;
- is financially strong, as confirmed by the
"excellent" or "superior"
claims-payment ratings for its ALIAC subsidiary
by:
- Standard & Poors
- Moody's Investors Service
- Duff & Phelps
- A.M. Best
- International
- Aetna International has more than 8.5 million
customers in Canada, Mexico, Taiwan, Chile,
Malaysia, Hong Kong, New Zealand, Peru, Argentina
and Indonesia;
- covers 2 million, or nearly 25%, of its customers
with health insurance and managed care services;
- in 1995 became the first foreign investor in
almost 30 years to be granted a license to sell
life and health insurance in the Philippines;
- contributed in excess of $1 billion to 1995
revenue, representing a compound annual growth
rate of more than 20% from 1990-1995;
- has a 34% market share in individual life
insurance in Mexico.
For more information about Aetna Inc., please visit the company's website at
www.aetna.com.