Exhibit 10.01
THE HARTFORD EMPLOYEE STOCK PURCHASE PLAN
(Including amendments effective January 1, 2010)
ARTICLE I
PURPOSE AND APPROVAL
1.1 Purpose of the Plan. The purpose of The Hartford Employee Stock Purchase
Plan is to provide a method whereby Employees of the Company may acquire a
proprietary interest in the Company through the purchase of Shares of common
stock of The Hartford. The Plan is intended to qualify as an “Employee Stock
Purchase Plan” as defined in the Code. The provisions of the Plan shall be
construed so as to extend and limit participation in a manner consistent with
the requirements of the Code.
1.2 Approval of the Plan. The Plan was approved by ITT Corporation, as sole
shareholder of The Hartford (formerly named ITT Hartford Group, Inc.), on
December 15, 1995. The Plan was adopted by the Board on July 18, 1996. On
May 27, 2009, the Company’s shareholders approved an increase of 10,000,000 of
the shares of common stock authorized pursuant to the Plan, bringing the total
aggregate number of shares that may be purchased under the Plan to 15,400,000.
ARTICLE II
DEFINITIONS
For purposes of the Plan, the following terms shall have the following meanings:
“Account” means the account maintained by the Company for a Participant pursuant
to Section 3.3.
“Act” means the Securities Exchange Act of 1934, as amended.
“Beneficial Owner” means any Person who, directly or indirectly, has the right
to vote or dispose of or has “beneficial ownership” (within the meaning of
Rule 13d-3 under the Act) of any securities of a company, including any such
right pursuant to any agreement, arrangement or understanding (whether or not in
writing), provided that: (A) a Person shall not be deemed the Beneficial Owner
of any security as a result of an agreement, arrangement or understanding to
vote such security (i) arising solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the Act and the applicable rules and regulations thereunder, or
(ii) made in connection with, or to otherwise participate in, a proxy or consent
solicitation made, or to be made, pursuant to, and in accordance with, the
applicable provisions of the Act and the applicable rules and regulations
thereunder, in either case described in clause (i) or (ii) above, whether or not
such agreement, arrangement or understanding is also then reportable by such
Person on Schedule 13D under the Act (or any comparable or successor report);
and (B) a Person engaged in business as an underwriter of securities shall not
be deemed to be the Beneficial Owner of any security acquired through such
Person’s participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
“Board” means the Board of Directors of The Hartford.
“Change of Control” means the occurrence of any of the following:
A. A report on Schedule 13D shall be filed with the Securities and Exchange
Commission pursuant to Section 13(d) of the Act disclosing that any Person
(within the meaning of Section 13(d) of the Act), other than The Hartford or a
subsidiary of The Hartford or any employee benefit plan sponsored by The
Hartford or a subsidiary of The Hartford is the Beneficial Owner of forty
percent or more of the outstanding stock of The Hartford entitled to vote in the
election of directors of The Hartford;

 

 

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B. Any Person (within the meaning of Section 13(d) of the Act), other than The
Hartford or a subsidiary of The Hartford or any employee benefit plan sponsored
by The Hartford or a subsidiary of The Hartford shall purchase shares pursuant
to a tender offer or exchange offer to acquire any stock of The Hartford (or
securities convertible into stock) for cash, securities or any other
consideration, provided that after consummation of the offer, the Person in
question is the Beneficial Owner, directly or indirectly, of fifteen percent or
more of the outstanding stock of The Hartford entitled to vote in the election
of directors of The Hartford (calculated as provided in paragraph (d) of
Rule 13d-3 under the Act in the case of rights to acquire shares);
C. Any merger, consolidation, recapitalization or reorganization of The Hartford
shall be consummated, other than any such transaction immediately following
which the persons who were the Beneficial Owners of the outstanding securities
of The Hartford entitled to vote in the election of directors of The Hartford
immediately prior to such transaction are the Beneficial Owners of at least 55%
of the total voting power represented by the securities of the entity surviving
such transaction entitled to vote in the election of directors of such entity
(or the ultimate parent of such entity) in substantially the same relative
proportions as their ownership of the securities of The Hartford entitled to
vote in the election of directors of The Hartford immediately prior to such
transaction; provided that, such continuity of ownership (and preservation of
relative voting power) shall be deemed to be satisfied if the failure to meet
such threshold (or to preserve such relative voting power) is due solely to the
acquisition of voting securities by an employee benefit plan of The Hartford,
such surviving entity or any subsidiary of such surviving entity;
D. Any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all or substantially all the assets of The Hartford
shall be consummated; or
E. Within any 24 month period, the persons who were directors of The Hartford
immediately before the beginning of such period (the “Incumbent Directors”)
shall cease (for any reason other than death) to constitute at least a majority
of the Board or the board of directors of any successor to The Hartford,
provided that any director who was not a director at the beginning of such
period shall be deemed to be an Incumbent Director if such director (i) was
elected to the Board by, or on the recommendation of or with the approval of, at
least two-thirds of the directors who then qualified as Incumbent Directors
either actually or by prior operation of this clause (E), and (ii) was not
designated by a Person who has entered into an agreement with The Hartford to
effect a transaction described in clause (C) or clause (D) of this definition of
Change of Control;
provided, however, that notwithstanding any provision in this Plan to the
contrary, in the event of a Change of Control as described in clause (C) or
clause (D) of this definition of Change of Control, in the case of a Participant
whose employment involuntarily terminates on or after the date of a shareholder
approval described in either of such clauses but before the date of a
consummation described in either of such clauses, the date of termination of
such a Participant’s employment shall be deemed for purposes of the Plan to be
the day following the date of the applicable consummation.
“Code” means the Internal Revenue Code of 1986, as amended.
“Committee” means the Compensation and Personnel Committee of the Board, or such
other Committee as the Board may designate to administer the Plan pursuant to
Article VI.
“Company” means The Hartford and Hartford Fire Insurance Company, and any other
entity designated as a Participating Corporation pursuant to Section 3.1, and
any successor of any of the foregoing by merger or purchase or otherwise.
“Compensation” means “Compensation” as defined in The Hartford Investment and
Savings Plan, excluding (i) amounts deferred under any nonqualified deferred
compensation plan, (ii) performance shares payable pursuant to The Hartford
Incentive Stock Plan and performance units payable pursuant to The Hartford
Performance Unit Plan, (iii) bonuses, and (iv) any other payments designated by
the Committee.

 

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“Effective Date” means the effective date of the Plan identified in
Section 7.10.
“Eligible Employee” means an Employee described in Section 3.2.
“Employee” means any person regularly employed by the Company and having an
employment relationship principally with the Company within the meaning of Code
Section 423 (subject to the exclusion of such persons or classes of persons as
the Committee may determine that is consistent with The Hartford Investment and
Savings Plan, Code Section 423 and other applicable law), but shall not include
any person who performs services for the Company as an independent contractor or
under any other non-employee classification.
“Exercise Price” means the purchase price for Shares purchased pursuant to the
exercise of an Option identified in Section 4.1.
“Fair Market Value” means, with respect to Shares on any particular date, the
closing market price of the Shares on the New York Stock Exchange on such date
or the nearest prior business day on which trading occurred on the New York
Stock Exchange.
“Offering” means an offering to Participants of Options to purchase Shares under
Section 4.1.
“Offering Commencement Date” means, prior to 2009 and on and after January 1,
2010, the first business day of the calendar quarter applicable to the Offering.
Effective with respect to any Offering Period commencing during 2009, “Offering
Commencement Date” means the first business day of January or July, with respect
to any Offering commencing in such month.
“Offering Termination Date” means, prior to 2009 and on and after January 1,
2010, the last business day of the calendar quarter applicable to the Offering.
Effective with respect to any Offering Period beginning during 2009, “Offering
Termination Date” means the last business day of the sixth calendar month ending
after the Offering Commencement Date.
“Option” means an option to purchase Shares granted pursuant to the Plan.
“Participant” means an Eligible Employee who has elected to participate in the
Plan pursuant to Section 3.3, and who has not become an ineligible Employee or
withdrawn from participation in the Plan pursuant to Article III.
“Participating Corporation” means a corporation designated pursuant to
Section 3.1(B).
“Person” has the meaning ascribed to such term in Section 3(a)(9) of the Act, as
supplemented by Section 13(d)(3) of the Act; provided, however, that Person
shall not include (i) The Hartford, any subsidiary of The Hartford or any other
Person controlled by The Hartford, (ii) any trustee or other fiduciary holding
securities under any employee benefit plan of The Hartford or of any subsidiary
of The Hartford, or (iii) a corporation owned, directly or indirectly, by the
stockholders of The Hartford in substantially the same proportions as their
ownership of securities of The Hartford.
“Plan” means The Hartford Employee Stock Purchase Plan.
“Plan Administrator” has the meaning described in Article VI.

 

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“Potential Change of Control” means:
A. A Person shall commence a tender offer, which if successfully consummated,
would result in such Person being the Beneficial Owner of at least 15% of the
stock of The Hartford entitled to vote in the election of directors of The
Hartford;
B. The Hartford enters into an agreement, the consummation of which would
constitute a Change of Control;
C. Solicitation of proxies for the election of directors of The Hartford by
anyone other than The Hartford, which, if such directors were elected, would
result in the occurrence of a Change of Control as described in clause (E) of
the definition of “Change of Control” above; or
D. Any other event shall occur which is deemed to be a Potential Change of
Control by the Board, the Committee, or any other appropriate committee of the
Board in its sole discretion.
“Share” means one share of common stock ($.01 par value) of The Hartford.
“The Hartford” means The Hartford Financial Services Group, Inc., and any
successor by merger or purchase or otherwise.
“The Hartford Income Protection Plan” means The Hartford Income Protection Plan,
as may be amended from time to time, certain standards of which are to be
applied to an Employee to the extent provided herein, regardless of whether such
Employee is covered under such Plan.
“The Hartford Investment and Savings Plan” means The Hartford Investment and
Savings Plan, as may be amended from time to time, certain standards of which
are to be applied to an Employee to the extent provided herein, regardless of
whether such Employee is covered under such Plan.
“Transfer Agent” means the officially designated transfer agent of The Hartford.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Granting of Options to Employees.
A. Granting of Options to Company Employees Only. To the extent permitted by the
Plan, Options to purchase Shares hereunder shall only be granted to Employees of
the Company.
B. Designation of Additional Participating Corporations. Designations of
additional corporations whose Employees may be granted Options to purchase
Shares to the extent permitted hereunder may be made from time to time by the
Committee from among the group of corporations which includes (i) The Hartford’s
subsidiary corporations as of the Effective Date of the Plan, and
(ii) corporations that become parent or subsidiary corporations of The Hartford
after the Effective Date of the Plan.
C. Employee Rights and Privileges. All Employees granted Options under the Plan
shall have the same rights and privileges, except that the Committee may from
time to time provide for differences in the rights and privileges of Employees
granted Options hereunder, so long as such differences do not jeopardize the
qualification of the Plan under Code Section 423 or violate other applicable
law.

 

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3.2 Eligibility of Employees. Employees who qualify as Eligible Employees
pursuant to this Section shall be eligible to elect to participate in the Plan
in accordance with Section 3.3.
A. Eligible Employee Defined. Except as otherwise required by Code Section 423
or other applicable law, an Employee shall be considered an Eligible Employee
for purposes of participation in the Plan on the first date such Employee has
completed at least six months of service as an Employee of the Company,
provided, however, that (i) except as the Board or the Committee may otherwise
provide on a basis uniformly applicable to all persons similarly situated,
“Eligible Employee” shall not include any “Ineligible Person,” which means any
person who performs services for the Company as an independent contractor or
under any other non-employee classification, and (ii) such Employee shall be
eligible to open an account with the registered broker-dealer firm and/or
banking entity designated as recordkeeper for the Plan.
B. Rehired Employees. If an Eligible Employee who has ceased to be an Employee
becomes an Employee again on a date thereafter, such Employee automatically
shall become an Eligible Employee effective as of the Offering Commencement Date
following such date.
C. Employees Deemed Ineligible for Participation.
(i) Receipt of Hardship Withdrawal. If an Employee receives a “safe harbor”
hardship withdrawal under The Hartford Investment and Savings Plan, or any other
plan maintained by the Company or its affiliates that is qualified under Code
Section 401(k), and such Employee ceases certain savings for a period of not
less than 6 months as required by any such plan, such Employee shall be deemed
an ineligible Employee for such 6 month period. Such Employee shall no longer be
deemed an ineligible Employee as of the Offering Commencement Date following the
end of such period.
(ii) Receipt of Benefits for Total Disability. An Employee shall be deemed an
ineligible Employee during the period such Employee receives benefits for a
total disability under The Hartford Income Protection Plan or any other
long-term disability plan or program maintained by the Company or its
affiliates. Such an Employee who is also a Participant shall be deemed to have
filed a withdrawal form in accordance with Section 3.4(A) on the date such
Employee first begins receiving such Long-Term Disability benefits, and such
deemed filing shall have the same consequences as would the actual filing of a
withdrawal form pursuant to Section 3.4(A). As of the Offering Commencement Date
following the end of the period during which such benefits are received, such
Employee shall no longer be deemed an ineligible Employee pursuant to this
Section.
(iii) 5% Owners. No Option shall be granted hereunder to any Employee who,
immediately after the Option is granted, would own, within the meaning of Code
Section 424(d), shares possessing 5% or more of the total combined voting power
or value of all classes of stock of The Hartford or any affiliate thereof. For
purposes of this Section, Shares that an Employee would be entitled to purchase
on the Offering Termination Date applicable to an Option that has been granted
pursuant to Section 4.1 or any other qualified employee stock purchase plan
maintained by the Company or its affiliates shall be treated as owned by the
Employee.
(iv) Employees with Exercise Rights In Excess of $25,000 Per Year. No Option
shall be granted hereunder to any Employee if, within the calendar year in which
such Option first becomes exercisable, such Option (together with any other
options that first become exercisable in such year that have been granted to the
Employee under the Plan or any other qualified employee stock purchase plan
maintained by the Company or its affiliates) would provide the Employee with the
right in such year to purchase Shares having a Fair Market Value (determined on
the Offering Commencement Date applicable to each such option) in excess of
$25,000.
(v) Other Employees. The Committee may from time to time deem ineligible for
participation hereunder any class or group of Employees, so long as the
exclusion of such class or group from participation does not jeopardize the
qualification of the Plan under Code Section 423 or violate other applicable
law.

 

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3.3 Election to Participate.
A. Payroll Deduction Authorization Form. An Eligible Employee may elect to
participate in the Plan by filing a properly completed authorization form, or
such other authorization as the Plan Administrator shall require, with the party
and by the date designated by the Plan Administrator. Such form shall authorize
automatic payroll deductions from a Participant’s Compensation for each pay
period commencing on the Offering Commencement Date next succeeding receipt of
the timely filed authorization form by the designated party (or such other date
as may be designated by the Plan Administrator), and continuing until (i) the
Participant changes the amount of such payroll deductions pursuant to
Section 3.3(C), (ii) the Participant becomes an ineligible Employee or withdraws
from participation in the Plan pursuant to Article III, (iii) the Plan is
suspended or terminated pursuant to Section 7.11, or (iv) the Committee
otherwise determines.
B. Amount of Payroll Deductions. The payroll deductions authorized by the
Participant shall be in whole percentages, not less than 1% and not more than
10% of Compensation, for each pay period, in effect on the date the payroll
deductions to which the authorization form relates are made.
C. Changes in Payroll Deductions. Subject to Section 3.3(B), a Participant may
increase or decrease the amount of payroll deductions previously authorized by
filing a properly completed change form, or such other authorization as the Plan
Administrator shall require, with the party and by the date designated by the
Plan Administrator. Such change shall be made in whole percentages of
Compensation, and shall be effective beginning on the Offering Commencement Date
next succeeding the receipt of the timely filed change form by the designated
party (or such other date as may be designated by the Plan Administrator).
D. Participant’s Account. The Company shall maintain payroll deduction Accounts
for all Participants. Payroll deductions made from a Participant’s Compensation
shall be credited to the Participant’s Account with respect to those payroll
dates taking place during the applicable Offering Period, and shall be applied
for the purchase of Shares pursuant to Article IV. No interest shall be paid or
allowed on any payroll deductions credited to a Participant’s Account.
3.4 Withdrawal From Participation.
A. In General. A Participant may at any time withdraw from participation in the
Plan by filing a properly completed withdrawal form, or such other authorization
as the Plan Administrator shall require, with the party and by the date
designated by the Plan Administrator. As soon as practicable after receipt of
the timely filed withdrawal form by the designated party, no further payroll
deductions shall be made from the Participant’s Compensation and no Options
shall be granted to the Participant during any Offering commencing thereafter,
unless the Participant elects again to participate in the Plan pursuant to
Section 3.3. If such withdrawal form is received by the designated party prior
to the last month of a particular Offering period, then all payroll deductions
at that time credited to the Participant’s Account which have not already been
applied for the purchase of Shares hereunder shall be repaid to the Participant.
If such withdrawal form is received by the designated party in the last month of
a particular Offering period, then all payroll deductions at that time credited
to the Participant’s Account which have not already been applied for the
purchase of Shares hereunder shall be applied to the purchase of Shares at the
end of such Offering period in accordance with the Plan.

 

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B. Termination of Employment.
(i) General Rule. Except as provided in Section 3.4(B)(ii), if a Participant
ceases to be an Employee for any reason, more than three months before an
Offering Termination Date, all payroll deductions credited to the Participant’s
Account as of the date the Participant’s employment terminates which have not
already been applied for the purchase of Shares hereunder shall be repaid to the
Participant. If a Participant ceases to be an Employee for any reason, less than
three months before an Offering Termination Date, all payroll deductions
credited to the Participant’s Account as of the date the Participant’s
employment terminates which have not already been applied for the purchase of
Shares hereunder shall be applied to the purchase of Shares after the Offering
Termination Date following such termination in accordance with the Plan.
(ii) Exception for Terminations Prior to the Last Month of an Offering Period.
If a Participant ceases to be an Employee for any reason prior to the last month
of a particular Offering period, and such Participant files a properly completed
withdrawal form (or such other authorization as the Plan Administrator shall
require) that is received prior to such last month by the party designated by
the Plan Administrator, then all payroll deductions credited to the
Participant’s Account as of the date the Participant’s employment terminates
which have not already been applied for the purchase of Shares hereunder shall
be repaid to the Participant.
ARTICLE IV
GRANTING AND EXERCISE OF OPTIONS
4.1 Granting of Options.
A. Offerings. The Plan shall be implemented by Offerings to Participants of
Options to purchase Shares. Prior to 2009 and on and after January 1, 2010,
Offerings shall be made each calendar quarter. During 2009, Offerings were made
semi-annually. Each Offering shall commence on the Offering Commencement Date
and shall terminate on the Offering Termination Date. Offerings shall continue
to be made under the Plan until the later of (i) the date the maximum number of
Shares identified in Article V has been purchased pursuant to Options granted
hereunder, or (ii) the Plan is terminated or suspended pursuant to Section 7.11.
B. Granting of Options. On the Offering Commencement Date for each Offering
period commencing prior to January 1, 2010, a Participant automatically shall be
granted a separate Option to purchase for the applicable Exercise Price a
maximum number of Shares equal to the accumulated payroll deductions credited to
the Participant’s Account as of the Offering Termination Date for such period,
divided by 85% of the lesser of (i) the Fair Market Value of the Shares on the
Offering Commencement Date, or (ii) the Fair Market Value of the Shares on the
Offering Termination Date. On the Offering Commencement Date for each Offering
period commencing on and after January 1, 2010, a Participant automatically
shall be granted a separate Option to purchase for the applicable Exercise Price
a maximum number of Shares equal to the accumulated payroll deductions credited
to the Participant’s Account as of the Offering Termination Date for such
period, divided by 95% of the Fair Market Value of the Shares on the Offering
Termination Date
C. Exercise Price. For Offering periods commencing prior to January 1, 2010, the
Exercise Price for Options granted hereunder shall be 85% of the lesser of
(i) the Fair Market Value of the Shares on the Offering Commencement Date, or
(ii) the Fair Market Value of the Shares on the Offering Termination Date. For
Offering periods commencing on and after January 1, 2010, the Exercise Price for
Options granted hereunder shall be 95% of the Fair Market Value of the Shares on
the Offering Termination Date.

 

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4.2 Exercise of Options.
A. Automatic Exercise. Except as otherwise provided in the Plan or determined by
the Committee, an Option granted to a Participant hereunder shall be deemed to
have been exercised automatically on the Offering Termination Date applicable to
such Option. Such exercise shall be for the purchase, on or as soon as
practicable after the Offering Termination Date, of the number of full and/or
fractional Shares that the accumulated payroll deductions credited to the
Participant’s Account as of the Offering Termination Date will purchase at the
applicable Exercise Price (but not in excess of the number of Shares for which
an Option has been granted to the Participant pursuant to Section 4.1). The
Participant’s Account shall be charged for the amount of the purchase, and the
Participant’s ownership of the Shares purchased shall be appropriately evidenced
on the books of the Company.
B. Restrictions on Exercise of Options.
(i) Exercise of Options. As required by Code Section 423, any Option granted
hereunder shall in no event be exercisable after the expiration of 27 months
following the Offering Commencement Date applicable thereto.
(ii) Exercise by the Participant Only. During the Participant’s lifetime, any
Option granted to the Participant shall be exercisable only by such Participant.
(iii) Other Restrictions. Under no circumstances shall any Option be exercised,
nor shall any Shares be issued hereunder, until such time as the Company shall
have complied with all applicable requirements of (a) the Act, (b) all
applicable listing requirements of any securities exchange on which the Shares
are listed, and (c) all other applicable requirements of law or regulation.
C. Issuance of Certificates. Except as otherwise provided in the Plan,
certificates with respect to Shares purchased hereunder shall be issued to the
Participant (i) upon request by the Participant to the Transfer Agent only if
such Shares were purchased at least 21 months prior to such request, or (ii) at
the direction of the Plan Administrator at such earlier time as determined
appropriate by the Plan Administrator. The Transfer Agent shall issue and
deliver such certificates as soon as practicable after receipt of such a
request. The Participant shall pay any fees charged by the Transfer Agent for
its services. The Hartford shall not be required to issue any certificates for
fractional Shares. If a Participant requests certificates for Shares for the
purpose of disposing of all of the Participant’s Shares, the Company shall pay
to the Participant cash in lieu of any fractional Shares, based on the Fair
Market Value of such fractional Shares as of the date of the issuance of such
certificates.
D. Registration of Certificates. Certificates shall be registered only in the
name of the Participant.
E. Rights as a Shareholder. The Participant shall have no rights or privileges
of a shareholder of The Hartford with respect to Options granted or Shares
purchased hereunder, unless and until such Shares shall have been appropriately
evidenced on the books of the Company.
F. Dividend Reinvestment. If The Hartford pays a cash dividend on Shares and a
Participant is entitled to receive such dividend on Shares that have been
purchased under the Plan, such dividend shall not be paid in cash, but shall be
paid in the form of additional Shares (“Reinvested Shares”), upon such terms and
conditions as the Plan Administrator shall determine, subject to this subsection
F. Reinvested Shares may be purchased directly from The Hartford from its
treasury and/or authorized and unissued Shares, and/or purchased on the open
market. Reinvested Shares shall be purchased at 100% of market value and not at
the Option Exercise Price set forth in Section 4.1(C). A Participant’s Account
shall be credited with the number of Shares, and fractions thereof, equal to the
amount of the dividend paid on a Participant’s Shares acquired under the Plan
divided by the purchase price of the Reinvested Shares.
Notwithstanding the foregoing, effective with respect to dividends payable after
January 2006, dividends shall be paid in cash unless the participant makes an
election to have such dividends reinvested. If such an election is made,
dividends shall be reinvested according to the terms described above.

 

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ARTICLE V
STOCK AND CORPORATE CHANGES
5.1 Maximum Shares. The maximum aggregate number of Shares which may be
purchased under the Plan shall be 15.4 million, subject to adjustment upon
certain corporate changes as provided in Section 5.2, plus such additional
Shares as may be authorized by the shareholders of The Hartford in accordance
with Code Section 423 (and as such additional shares may be subsequently
adjusted as provided in Section 5.2). If the total number of Shares for which
Options are exercised on any Offering Termination Date exceeds such maximum
number, the Committee shall make a pro rata allocation of the Shares available
for purchase in as nearly a uniform manner as shall be practicable and as it
shall determine to be equitable, and the balance of payroll deductions credited
to the Account of each Participant shall, to the extent not applied for the
purchase of Shares, be refunded to the Participants as soon as practicable
thereafter.
5.2 Adjustment Upon Corporate Changes. In the event of any stock dividend, stock
split, recapitalization (including, without limitation, the payment of an
extraordinary dividend), merger, consolidation, combination, spin-off,
distribution of assets to shareholders (other than ordinary cash dividends),
exchange of Shares, or other similar corporate change with respect to The
Hartford, the Committee (i) shall determine the kind of Shares that may be
purchased under the Plan after such event, and (ii) may, in its discretion,
adjust the aggregate number of Shares available for purchase under the Plan or
subject to outstanding Options and the respective Exercise Prices applicable to
outstanding Options. Any adjustment made by the Committee pursuant to the
preceding sentence shall be conclusive and binding on the Company and all
Employees. For purposes of this Section, any distribution of Shares to
shareholders in an amount aggregating 20% or more of the outstanding Shares
shall be deemed a stock split, and any distribution of Shares aggregating less
than 20% of the outstanding Shares shall be deemed a stock dividend.
5.3 Change of Control. Notwithstanding anything herein to the contrary, and to
the extent not prohibited by Code Section 423, upon the occurrence of a Change
of Control, the Plan shall continue without interruption and Participants may
continue to participate in the Plan (unless participation first terminates under
the terms of the Plan) until the earlier of (A) the date on which the Plan is
suspended or terminated by the Committee, or (B) such other date as may be
determined by the Plan Administrator. The earlier of such dates shall be deemed
to be the Offering Termination Date for purposes of the final purchase of shares
under the Plan.
ARTICLE VI
ADMINISTRATION
6.1 Appointment of Committee.
A. Except as otherwise provided in the Plan or delegated by the Committee
pursuant to this Article VI, the Plan shall be administered by the Committee.
B. The Committee shall have the full power, discretion and authority to
interpret, construe and administer the Plan and any part thereof in any manner
deemed appropriate in its sole discretion, and to resolve all questions arising
under the Plan in any manner deemed appropriate in its sole discretion,
including, but not limited to, questions of interpretation with respect to
eligibility to participate in the Plan, employment status, amount and timing of
benefits payable under the Plan and all other definitions and questions of
interpretation.
C. The resolutions, constructions, interpretations and other determinations and
actions taken by the Committee hereunder shall be final, conclusive and binding
for all purposes on all parties who have a claim or interest under the Plan.
D. The Committee may, in its sole discretion, delegate such of its powers as it
deems appropriate to the Executive Vice President, Human Resources (or successor
or other person holding a similar position) of The Hartford or the Chief
Executive Officer of The Hartford.

 

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6.2 Delegation of Certain Authority to Plan Administrator. Except as otherwise
provided in the Plan, required by applicable law, or determined by the
Committee, the Plan Administrator shall be the Executive Vice President, Human
Resources of The Hartford (or successor or other person holding a similar
position) or the Chief Executive Officer of The Hartford. Except as otherwise
provided in the Plan, required by applicable law, or determined by the
Committee: (A) the Plan Administrator shall be responsible for the performance
of such administrative duties under this Plan that are not otherwise reserved to
the Committee by the Plan, (B) the Plan Administrator shall have the full power,
discretion and authority to interpret, construe and administer the Plan and any
part thereof in any manner deemed appropriate in its sole discretion, and to
resolve all questions arising under the Plan in any manner deemed appropriate in
its sole discretion, including, but not limited to, questions of interpretation
with respect to eligibility to participate in the Plan, employment status,
amount and timing of benefits payable under the Plan, and all other definitions
and questions of interpretation, (D) the resolutions, constructions,
interpretations and other determinations and actions taken by the Plan
Administrator hereunder shall be final, conclusive and binding for all purposes
on all parties who have a claim or interest under the Plan, and (E) the Plan
Administrator may, in its sole discretion, delegate such of its powers as it
deems appropriate to other members of senior management of the Company.
ARTICLE VII
MISCELLANEOUS
7.1 No Employment Rights. The Plan shall not, directly or indirectly, create in
any Employee or class of Employees any right with respect to continuation of
employment with the Company. The Plan shall not interfere in any way with the
Company’s right to terminate, or otherwise modify, an Employee’s employment at
any time.
7.2 Rights Not Transferable. Any rights of the Participant under the Plan shall
not be transferred other than (i) by will, (ii) by the laws of descent or
distribution, or (iii) pursuant to a qualified domestic relations order as
defined in the Code.
7.3 Tax Withholding. The Committee shall have the right to make such provisions
as deemed appropriate in its sole discretion to satisfy any obligation of the
Company to withhold federal, state or local income or other taxes (including
FICA obligations) incurred by reason of the operation of the Plan or an option
granted under the Plan, including but not limited to at any time: (i) requiring
a Participant to submit payment to the Company for such taxes before making
settlement of any Shares or other amount due under the Plan, (ii) withholding
such taxes from wages or other amounts due to the Participant before making
settlement of any Shares or other amount due under the Plan, (iii) making
settlement of any Shares or other amount due under the Plan to a Participant
part in Shares and part in cash to facilitate satisfaction of such withholding
obligations, or (iv) receiving Shares already owned by, or withholding Shares
otherwise due to, the Participant in an amount determined necessary to satisfy
such withholding obligations; provided, however, that, notwithstanding any
language herein to the contrary, any Participant who is an executive officer of
the Company (within the meaning of Section 16 of the Act) shall have the right
to satisfy his or her obligations to the Company pursuant to this Section 7.3 by
instructing the Company not to deliver to the Participant Shares otherwise
deliverable to the Participant in an amount sufficient to satisfy such
obligations to the Company.
7.4 Compliance with Applicable Law. The Plan shall not be interpreted or
administered in any way that would cause the Plan to be in violation of Code
Section 423 or other applicable law.

 

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7.5 Expenses. The Company shall pay all expenses related to the administration
of the Plan, except charges imposed by the Transfer Agent for issuing
certificates for Shares, sales charges and commissions applicable to Shares,
charges for back records and research performed at the request of the
Participant, and such other expenses as may be designated by the Committee. The
Participant shall pay all expenses related to administration of the Plan that
are not paid for by the Company.
7.6 Delivery of Shares to Estate Upon Death. In the event of the death of a
Participant, any Shares purchased by the Participant hereunder, other than
Shares as to which the Participant previously received certificates, shall be
issued and delivered to the estate of the Participant as soon as practical
thereafter.
7.7 Effect of Plan. The provisions of the Plan shall be binding upon, and inure
to the benefit of, all successors of each Participant, including without
limitation the Participant’s estate and the executors, administrators or
trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or
representative of creditors of such Participant.
7.8 Use of Funds. All funds received or held by the Company pursuant to the Plan
may be used by the Company for any corporate purpose, and the Company shall not
be obligated to segregate such funds from its general assets.
7.9 Plan Share Purchases. Shares subject to purchase by Participants under the
Plan shall, in the discretion of the Committee, be made available from treasury
Shares, authorized but unissued Shares, reacquired Shares, and/or Shares
purchased on the open market.
7.10 Effective Date. The Plan shall be effective on the first business day of
the calendar quarter occurring on or after the later of (i) October 1, 1996,
(ii) the effective date of the Form S-8 Registration Statement covering Shares
authorized for purchase under the Plan, or (iii) such other date as may be
designated by the Committee.
7.11 Amendment or Termination of the Plan.
A. The Committee may from time to time amend, modify or suspend the Plan to the
extent it deems, in its sole discretion, advisable and consistent with the
purposes of the Plan and applicable law.
B. Notwithstanding the foregoing, no amendment that would (i) effect an increase
in the number of Shares which may be purchased under the Plan, which increase is
of a type that would require shareholder approval under Code Section 423, or
(ii) effect a change in the designation of the corporations whose Employees may
be offered Options under the Plan, which change is of a type that would require
shareholder approval under Code Section 423, shall become effective unless the
shareholder approval required by Code Section 423 is obtained.
C. Notwithstanding anything in this Plan to the contrary, the Plan shall not be
amended, modified, suspended or terminated during the period in which a Change
of Control is threatened. For purposes of the preceding sentence, a Change of
Control shall be deemed to be threatened for the period beginning on the date of
any Potential Change of Control, and ending upon the earliest of: (a) the second
anniversary of the date of such Potential Change of Control, (b) the date a
Change of Control occurs, or (c) the date the Board or the Committee determines
in good faith that a Change of Control is no longer threatened. Further,
notwithstanding anything in this Plan to the contrary, no amendment,
modification, suspension or termination following a Change of Control shall
adversely impair or reduce the rights of any person with respect to a prior
Award without the consent of such person.
D. Amendments to the Plan that are solely of an administrative nature may be
made by either The Hartford’s Chairman and Chief Executive Officer or Executive
Vice President, Human Resources.
E. The Committee or the Board shall have the power at any time to terminate the
Plan and all rights of Employees under the Plan.

 

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7.12 Subsidiary Plans Required to Satisfy Local Law. The Committee may approve
or adopt discount Share purchase plans, or other similar or related plans
consistent with the purposes of the Plan, for Employees of subsidiaries of the
Company as required to meet the provisions of the tax or securities laws or
other applicable laws, rules or regulations in the jurisdictions in which any
subsidiary operates. Any Shares purchased under any such subsidiary plans shall
be deemed to have been purchased under the Plan. The Committee, in its sole
discretion and to the extent permitted by applicable law, may delegate its
authority under this Section to (i) any other appropriate committee of the
Company, or (ii) to the Chief Executive Officer of The Hartford or any other
appropriate officer of the Company.
7.13 Governing Law. The laws of the State of Connecticut shall govern all
matters relating to the Plan, except to the extent such laws are superseded by
the laws of the United States.
7.14 Merger Clause. The terms of the Plan are wholly set forth in this document,
including certain standards of certain other plans which are to be applied to an
Employee for purposes of the Plan to the extent provided herein, regardless of
whether such Employee is covered under such plans. This Section shall in no way
limit the authority of the Committee and the Plan Administrator to administer
the Plan as provided herein.

 

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