Exhibit 10.3

The Hartford Financial Services Group, Inc.

Annual Executive Bonus Program

The Hartford Financial Services Group, Inc. (the “Company”) has an annual
executive bonus program (the “Bonus Program”) that is intended to provide
certain Company executives and key managers with incentive compensation based
upon the achievement of pre-established performance goals and individual
performance. The Bonus Program is intended to provide an incentive for
profitable growth and to motivate participating executives and key managers
toward higher achievement and operating results, to tie their goals and
interests to those of the Company and its shareholders and to enable the Company
to attract and retain highly qualified executives and key managers.

United States tax laws generally do not allow publicly held companies to obtain
tax deductions for compensation of more than $1 million paid in any year to any
of their five most highly compensated executive officers unless such payments
are “performance-based” as defined in the tax laws. Where the performance
criteria provide the Company a choice among different measures, one of the
requirements for compensation to be performance-based under those laws is that
the Company must obtain shareholder approval every five years of the material
terms of the performance goals for such compensation. In accordance with
Internal Revenue Service rules under Section 162(m) of the Internal Revenue Code
(“Section 162(m)”), the material terms of the Bonus Program constitute the
framework within which the Compensation and Personnel Committee of the Board of
Directors (the “Committee”) would establish the actual performance goals.

The Committee generally takes reasonable measures to avoid the loss of a Company
tax deduction due to Section 162(m). However, amendments can be made to the
Bonus Program that can increase its cost to the Company and can alter the
allocation of benefits among participating executive officers. In addition, the
Committee may in certain circumstances approve bonus or other payments outside
of the Bonus Program that do not meet the material terms of the Bonus Program
described above and that may not be deductible.

The Company’s shareholders approved the following material terms of the Bonus
Program on May 18, 2005, at the Company’s Annual Meeting of Shareholders:

1. Class of Eligible Executives. The class of eligible executive shall include
the five most highly compensated executive officers of the Company and its
subsidiaries for any given year.

2. Performance Criteria. Awards of bonuses pursuant to the Bonus Program must be
stated for the five most highly compensated executive officers in terms of an
objective formula or standard as required by Section 162(m), which may be based
on any one or more of the following factors (collectively, the “Performance
Factors”): (i) earnings per share, (ii) return on equity, (iii) cash flow,
(iv) return on total capital, (v) return on assets, (vi) economic value added,
(vii) increase in surplus, (viii) reductions in operating expenses,

 

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(ix) increases in operating margins, (x) earnings before income taxes and
depreciation, (xi) total shareholder return, (xii) return on invested capital,
(xiii) cost reductions and savings, (xiv) earnings before interest, taxes,
depreciation and amortization, (xv) pre-tax operating income, (xvi) net income,
(xvii) after-tax operating income or (xviii) productivity improvements. The
objective formula or standard shall be:

  •   determined solely by reference to any one or more of the Performance
Factors of the Company (or the Performance Factors of any subsidiary or
affiliate of the Company, or any division or unit thereof), or     •   based on
any one or more of the Performance Factors of the Company (or the Performance
Factors of any subsidiary or affiliate of the Company, or any division or unit
thereof), as compared with the Performance Factors of other companies or
entities, or     •   based on an executive’s attainment of personal objectives
with respect to any one or more of the Performance Factors of the Company (or
the Performance Factors of any subsidiary or affiliate of the Company, or any
division or unit thereof), or with respect to any one or more of the following:
(i) growth and profitability, (ii) customer satisfaction, (iii) leadership
effectiveness, (iv) business development, (vi) negotiating transactions and
sales or (vii) developing long-term business goals.

3. Maximum Payable to any Executive for Any One Year. The maximum bonus that may
be paid to any of the five most highly compensated executive officers for any
given year is the lesser of (a) 300% of such executive’s annual bonus target in
effect at the beginning of such year, as approved by the Committee, or (b)
$5,000,000.