EX-10.12



 






Exhibit 10.12




THE HARTFORD DEFERRED RESTRICTED STOCK UNIT PLAN

(as amended effective December 30, 2005)




ARTICLE I

CREATION AND PURPOSE



1.1 Creation of the Plan. The Plan is created pursuant to the terms of the Incentive
Stock Plan relating to restricted stock, which terms are incorporated herein by reference.
Capitalized terms used in this Plan and not defined herein shall have the meanings assigned to such
terms by the Incentive Stock Plan.



1.2 Purpose of the Plan. The purpose of the Plan is to motivate and reward superior
performance on the part of Key Employees of The Hartford and thereby to attract and retain Key
Employees of superior ability. In addition, the Plan is intended to further the opportunities for
stock ownership by such Key Employees in order to increase their proprietary interest in The
Hartford, and as a result, their interest in the success of the Company. Awards consisting of
contractual rights to receive shares of Stock (“Units”) may be made under the Plan, in the
discretion of the Committee, to Key Employees who properly elect to participate in the Plan.
Participation in the Plan shall require a Key Employee’s irrevocable election to receive Units in
exchange for all or a portion of certain Compensation that may become payable to such Key Employee,
such Units entitling the Key Employee to receive Stock at the end of a three year restriction
period or other restriction period permitted by the Committee (or earlier, if required by the
Plan), to the extent provided herein.




ARTICLE II

DEFINITIONS



“Account” means an account maintained on behalf of a Participant on the books of the
Company in accordance with the terms hereof.



“Act” means the Securities Exchange Act of 1934, as amended.



“Award Date” means the date designated by the Committee for the award of Units pursuant to
the Plan.



“Board”  means the Board of Directors of the Company.



“Beneficiary” shall have the meaning assigned by the Incentive Stock Plan.



“Change of Control” shall have the meaning assigned by the Incentive Stock Plan.



“Committee” means the Compensation and Personnel Committee of the Board, or such other


 









 






Committee as the Board may designate to administer the Plan.



“Company” means The Hartford Financial Services Group, Inc. and its successors and assigns.



“Compensation” means compensation payable to a Key Employee in the form of (i) cash,
including cash bonuses, and (ii) Stock and other stock-based awards granted pursuant to any plan or
other arrangement of the Company, which compensation the Committee designates from time to time as
eligible for an election to receive Units under the Plan.



“Dividend Amount” means the per share cash dividend amount paid on the Stock on a
particular dividend payment date.



“Dividend Conversion Price” means the Fair Market Value of one share of the Stock on the
Dividend Record Date.



“Dividend Record Date” means the date fixed by the Board as the date for determining those
holders of Stock who are entitled to receive payment of any dividend declared by the Board.



“Elective Units” shall have the meaning assigned by Article III of the Plan.



“Fair Market Value” shall have the meaning assigned by the Incentive Stock Plan.



“Incentive Stock Plan” means The Hartford Incentive Stock Plan, as amended from time to
time.



“Key Employee” shall have the meaning assigned by the Incentive Stock Plan.



“Normal Vesting Date” means the third anniversary of the Award Date, or such other date
that the Committee may designate with respect to any particular award of Units.



“Participant” means a Key Employee who properly elects to participate in the Plan pursuant
to Article V of the Plan.



“Participating Company” shall have the meaning assigned by the Incentive Stock Plan.



“Plan” means this The Hartford Deferred Restricted Stock Unit Plan, as may be amended from
time to time.



“Potential Change of Control” shall have the meaning assigned by the Incentive Stock Plan.



“Premium Units” shall have the meaning assigned by Article IV of the Plan.



“Retirement” shall have the meaning assigned by the Incentive Stock Plan.



“Stock” shall have the meaning assigned by the Incentive Stock Plan.




 









 







“The Hartford” shall mean the Company and its subsidiaries, and their successors and
assigns.



“Total Disability” shall have the meaning assigned by the Incentive Stock Plan.



“Units” shall have the meaning assigned by Article I of the Plan.




ARTICLE III

ELECTIVE UNITS



3.1 Award of Elective Units. On the Award Date, the Committee may, in its discretion,
award to each Participant a number of whole and/or fractional contractual rights to receive in
accordance with the Plan shares of Stock (the “Elective Units”) equal to: (A) the portion of
Compensation elected by the Participant in accordance with Article V, divided by (B) the Fair
Market Value of the Stock on the Award Date. If all or a portion of the Compensation is in the
form of Stock, such Stock shall be valued based on the Fair Market Value of the Stock on the Award
Date. If the Committee does not make an award to a Participant pursuant to this Section, any
election made by the Participant pursuant to Article V shall be null and void.



3.2 Crediting of Elective Units to Account. The number of whole and/or fractional
Elective Units awarded to a Participant pursuant to this Article III shall be credited, as of the
Award Date, to the Participant’s Account.



3.3 Vesting of Elective Units. The rights of a Participant with respect to Elective Units
awarded hereunder shall be fully vested and nonforfeitable at all times. To the extent provided in
Article VII, the Participant shall become entitled to receive certificates for shares of Stock
and/or cash corresponding to such Elective Units credited to the Participant’s Account on the
applicable date identified in Article VII.




ARTICLE IV

PREMIUM UNITS



4.1 Award of Premium Units. Except as provided below, on the Award Date, the Committee
shall award to each Participant a number of additional whole and/or fractional contractual rights
to receive in accordance with the Plan shares of Stock (the “Premium Units”) equal to 10% of the
Elective Units awarded to the Participant pursuant to Article III. Notwithstanding the foregoing,
the


 









 






Committee may decide that no Premium Units shall be awarded with respect to any particular award of
Elective Units, in which case all of the provisions of the Plan relating to Premium Units shall be
null and void and without effect with respect to such Elective Units.



4.2 Crediting of Premium Units to Account. The number of whole and/or fractional Premium
Units awarded to a Participant pursuant to this Article IV shall be credited, as of the Award Date,
to the Participant’s Account.



4.3 Vesting of Premium Units. Except as otherwise provided in the Plan, a Participant’s
rights with respect to Premium Units shall vest on the Normal Vesting Date. To the extent provided
in Article VII, the Participant shall become entitled to receive certificates for shares of Stock
corresponding to vested Premium Units credited to the Participant’s Account on the applicable date
identified in Article VII.





A. Termination of Employment. In the event of a Participant’s termination of
employment with all Participating Companies prior to the Normal Vesting Date: (i) due to
death, (ii) due to Total Disability, or (iii) solely in the case of a Participant with an
original hire date with a Participating Company on or before January 1, 2002, due to
Retirement, the Premium Units credited to the Participant’s Account as of the date of such
termination shall become immediately vested and nonforfeitable. In the event of a
Participant’s termination of employment with all Participating Companies for any other
reason, any Premium Units credited to the Participant’s Account that have not become vested
on or before the date of such termination shall be forfeited, unless the Committee
determines otherwise in its sole discretion in accordance with the Incentive Stock Plan.
Premium Units forfeited by a Participant pursuant to this Section immediately shall be
deducted from the Participant’s Account.



ARTICLE V

PARTICIPATION



5.1 Election to Participate. A Key Employee may participate in the Plan by filing a
properly completed election agreement, or such other authorization as the Committee may require,
with the party and by the date designated by the Committee. The election of a Key Employee
hereunder shall only apply to the Compensation as to which the election is made, and shall be
irrevocable, unless otherwise determined by the Committee in its sole discretion. The election of
a Key Employee shall be deemed null and void if no award pursuant to Article III hereof is made to
the Key Employee with respect to such election.



5.2 Election Form. The election agreement completed by a Participant pursuant to this
Article V shall: (A) identify a portion of the Participant’s Compensation that may become payable
with respect to the Participant’s services, (B) contain the Participant’s election to receive such
portion (which would otherwise become payable in cash, Stock or otherwise) in the form of Elective
Units in accordance with the Plan, and (C) contain such other information as the Committee may require.




 









 







5.3 Maximum and Minimum Amounts Required for Participation. The Committee may designate
a maximum and a minimum portion of a Key Employee’s Compensation, in terms of a percentage or other
amount, as to which an election may be made hereunder.




ARTICLE VI

DIVIDEND EQUIVALENTS



6.1 Dividend Equivalents on Elective Units. As soon as practicable after any dividend is
paid on the Stock, a Participant’s Account shall be credited with additional Elective Units, such
crediting to be effective retroactive to the Dividend Record Date. The amount of such additional
Elective Units shall be equal to: (A) the product of (i) the Dividend Amount, and (ii) the number
of whole and fractional Elective Units credited to the Participant’s Account as of the Dividend
Record Date, divided by (B) the Dividend Conversion Price.



6.2 Dividend Equivalents on Premium Units. As soon as practicable after any dividend is
paid on the Stock, a Participant’s Account shall be credited with additional Premium Units, such
crediting to be effective retroactive to the Dividend Record Date. The amount of such additional
Premium Units shall be equal to (A) the product of (i) the Dividend Amount, and (ii) the number of
whole and fractional Premium Units credited to the Participant’s Account as of the Dividend Record
Date, divided by (B) the Dividend Conversion Price.



6.3 Treatment of Units Credited in Respect of Dividend Equivalents. Any additional Units
credited to the Account of a Participant pursuant to this Article VI shall, as of the date so
credited, be treated for all purposes of this Plan (including, without limitation, the provisions
hereof pertaining to the crediting of future dividend equivalents and the vesting of Premium Units)
as though part of the Elective Units and Premium Units in relation to which such additional Units
were credited, respectively.



6.4 Non-Cash Dividends. In the event that a stock dividend is paid on the Company’s
Stock, the appropriate Dividend Amount for purposes of this Article VI shall be determined in
accordance with Section 9.3 hereof.




ARTICLE VII

RECEIPT OF SHARES AND / OR CASH IN RESPECT OF UNITS



7.1 General Rule. Except as otherwise provided herein, as soon as practicable after the
earlier to occur of: (A) the Normal Vesting Date, or (B) the date a Participant’s employment with
all Participating Companies terminates, the Company shall issue to such Participant certificates
for shares of Stock corresponding to the number of whole Elective Units and whole vested Premium
Units credited to the Participant’s Account as of the earlier of such dates.




 









 







7.2 Fractional Units. Notwithstanding anything herein to the contrary, if any vested
fractional Units are credited to a Participant’s Account (after adding together all fractional
Elective and vested Premium Units then credited to the Participant’s Account) on the earlier of the dates identified in
Section 7.1, such fractional Units shall be paid to the Participant in cash, based on the Fair
Market Value of the Company’s Stock on such date.



7.3 Voluntary Deferral. Upon such terms and conditions as the Committee may determine, a
Participant may be permitted to elect, by written notice to the Company filed by the date and on
such form or other authorization as the Company may require, to defer the receipt of such Stock
otherwise required by Section 7.1. Such deferral shall occur (as determined by the Committee)
pursuant to the Plan or such other arrangement maintained by The Hartford, if any, in which the
Participant is eligible to participate as of such date. Such election shall have the effect of
deferring such receipt until the date permitted by the Committee, and/or such other effect as
permitted by the Committee.



7.4 Change of Control. Notwithstanding anything herein to the contrary, upon the
occurrence of a Change of Control, any Premium Units then credited to each Participant’s Account
shall immediately become fully vested. In such event, the Committee may, in its discretion,
provide, either absolutely or subject to the election of each Participant, that each Participant
shall be paid immediately following such Change of Control a lump sum cash amount equal to the
number of whole and fractional Elective Units credited to the Participant’s Account plus the
Participant’s vested whole and fractional Premium Units, multiplied by the “Formula Price” as such
term is defined in the Incentive Stock Plan. Further, notwithstanding any provision in this Plan to the contrary, in the event of a Change of
Control as described in Section 9(a)(iii) or Section 9(a)(iv) of the Incentive Stock Plan, in the
case of an awardee whose employment involuntarily terminates on or after the date of a shareholder
approval described in either of such Sections but before the date of a consummation described in
either of such Sections, the date of termination of such an awardee’s employment shall be deemed
for purposes of this Plan to be the day following the date of the applicable consummation.




ARTICLE VIII

ADMINISTRATION



8.1
Administration by Committee. Except as otherwise delegated by the Committee pursuant
to this Plan or the Incentive Stock Plan, this Plan shall be administered by the Committee.




     (A) All decisions, determinations or actions of the Committee made or taken pursuant to grants of
authority under the Plan shall be made or taken in the sole discretion of the Committee and shall
be final, conclusive and binding on all persons for all purposes.



     (B) The Committee shall have full power, discretion and authority to interpret, construe and
administer the Plan and any part thereof, and its interpretations and constructions thereof and
actions taken thereunder shall be, except as otherwise determined by the Board, final,
conclusive and binding on all persons for all purposes.



     (C) The Committee’s decisions and determinations under the Plan need not be uniform



 









 







and may be made selectively among Key Employees, whether or not such Key Employees are similarly situated.



     (D) The Committee may, in its sole discretion, delegate such of its powers as it deems
appropriate to the Group Senior Vice President, Human Resources (or other person holding a similar
position) or the Chief Executive Officer, except that Awards to executive officers shall be made,
and matters related thereto shall be determined, solely by the Committee or the Board or any other
appropriate committee of the Board.


8.2 Applicability of Incentive Stock Plan. In the event of a conflict between the terms
of this Plan and the terms of the Incentive Stock Plan, the terms of the Incentive Stock Plan shall
control.




ARTICLE IX

MISCELLANEOUS



9.1 Tax Withholding. The Committee or the Group Senior Vice President, Human Resources
(or other person holding a similar position) shall have the right to make such provisions as deemed
appropriate in its sole discretion to satisfy any obligation of a Participating Company to withhold
federal, state or local income or other taxes incurred by reason of the operation of the Plan or an
Award under the Plan, including but not limited to at any time: (A) requiring a Key Employee to
submit payment to a Participating Company for such taxes before making settlement of any Award of
Units or Stock or other amount due under the Plan, (B) withholding such taxes from wages or other
amounts due to the Key Employee before making settlement of any Award of Units or Stock or other
amount due under the Plan, (C) making settlement of any Award of Units or Stock or other amount due
under the Plan part in Units or Stock and part in cash to facilitate satisfaction of such
withholding obligations, or (D) receiving Units or Stock already owned by the Key Employee or
withholding Units or Stock otherwise due to the Key Employee in an amount determined necessary to
satisfy such withholding obligations; provided, however, that, notwithstanding any language herein
to the contrary, any Key Employee 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 9.1 by instructing the Company not to deliver to the Key Employee Stock
otherwise deliverable to the Key Employee in an amount sufficient to satisfy such obligations to
the Company.




 









 







9.2 No Employment Rights. The Plan shall not, directly or indirectly, create in any
Participant any right with respect to continuation of employment with any of the Participating
Companies or to the receipt of any bonus or other compensation. The Plan shall not interfere in
any way with the rights of the applicable Participating Company to terminate, or otherwise modify,
the employment of any Participant or its bonus or other compensation policies at any time.



9.3 Adjustments for Corporate Transactions. Upon the occurrence of an event described in
Section 13 of the Incentive Stock Plan, the Committee may adjust the number of Units credited to
the Account of a Participant in accordance with the terms of that Section.



9.4 Delivery of Shares of Stock in the Event of Death. In the event of the death of a
Participant, certificates for shares of Stock corresponding to the Elective Units and vested
Premium Units then credited to the Account of the Participant shall be transferred as soon as
practicable thereafter to such Beneficiary or Beneficiaries as properly designated by the
Participant in accordance with Section 10 of the Incentive Stock Plan. If no such designation is
in effect at the time of the Participant’s death, or if no designated Beneficiary survives the
Participant or if any Beneficiary designation conflicts with applicable law, such certificates
and/or cash shall be transferred to the Participant’s estate as provided in Section 10 of the
Incentive Stock Plan. If the Committee is in doubt as to the right of any person to receive such
certificates, the procedures described in Section 10 of the Incentive Stock Plan shall apply.



9.5 Rights Not Transferable. The rights of a Participant under the Plan shall not be
sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of, other than by will,
or by the laws of descent or distribution. The foregoing restriction shall be in addition to any
restrictions imposed by applicable law on a Participant’s ability to dispose of Units awarded under
the Plan.



9.6 Effect of Plan. The provisions of the Plan shall be binding upon all successors and
assigns of a 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 the Participant.



9.7 Use of Funds and Assets. All funds and assets received or held by the Company pursuant
to or in connection with the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such amounts from its general assets. The Company may
establish a trust or other entity to aid in meeting its obligations under the Plan.



9.8 Source of Stock for the Plan. Except as otherwise provided in the Incentive Stock
Plan, shares of Stock to be issued hereunder may be made available from authorized but unissued
stock, shares held by the Company in treasury or shares purchased on the open market.




 









 







9.9 Amendment and Termination of the Plan. Subject to the provisions of the Incentive
Stock Plan, the Board of Directors may amend or terminate this Plan at any time, and the Committee
may amend this Plan at any time in its sole discretion; provided that, in the event of a
Change of Control, no amendment or termination thereafter shall impair or reduce the rights of any
person with respect to any award made under the Plan. Notwithstanding the foregoing, 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 earlier of: (I) the second anniversary of the date of such Potential Change of Control, (II)
the date a Change of Control occurs, or (III) the date the Board or the Committee determines in
good faith that a Change of Control is no longer threatened. Further, notwithstanding the
foregoing, 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 of Units
without the consent of such person.



9.10 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.



9.11 Severability of Provisions. If any provision of the Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and the Plan
shall be construed and enforced as if such invalid or unenforceable provisions had not been
included herein.