Document:

Exhibit 10.08

Exhibit 10.08

The Hartford

Senior Executive Severance Pay Plan

(Tier 2)

This document describes your benefits under The Hartford Senior Executive Severance Pay Plan, and

includes the text of the Plan and other important information.

As Amended and Restated Effective February 22, 2011

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	1. Purpose
	 	 	1	 
	 
	 	 	 	 
	2. Application of Plan
	 	 	1	 
	 
	 	 	 	 
	3. Covered Employees
	 	 	1	 
	 
	 	 	 	 
	4. Severance Pay Upon Termination of Employment
	 	 	2	 
	 
	 	 	 	 
	5. Schedule of Severance Pay
	 	 	3	 
	 
	 	 	 	 
	6. Pro-Rata Annual Bonus and Treatment of Long Term Incentives
	 	 	4	 
	 
	 	 	 	 
	7. Notice or Pay in Lieu of Notice
	 	 	5	 
	 
	 	 	 	 
	8. Payment of Severance Pay and Pro-Rata Annual Bonus
	 	 	5	 
	 
	 	 	 	 
	9. Employee Benefit Plan Coverage While Receiving Severance Pay
	 	 	5	 
	 
	 	 	 	 
	10. Sale, Divestiture, Outsourcing, Closure or Relocation
	 	 	6	 
	 
	 	 	 	 
	11. Severance Pay in the Event of a Change of Control
	 	 	7	 
	 
	 	 	 	 
	12. Separation and Release Agreement
	 	 	11	 
	 
	 	 	 	 
	13. Offset
	 	 	11	 
	 
	 	 	 	 
	14. Administration of Plan
	 	 	12	 
	 
	 	 	 	 
	15. Termination or Amendment
	 	 	13	 
	 
	 	 	 	 
	16. Miscellaneous
	 	 	14	 
	 
	 	 	 	 
	17. Other Important Information
	 	 	15	 
	 
	 	 	 	 
	(A) Notice
	 	 	15	 

 

 

 

THE HARTFORD SENIOR EXECUTIVE

SEVERANCE PAY PLAN

	1.	 	Purpose

The purpose of The Hartford Senior Executive Severance Pay Plan (the “Plan”) is to assist in
occupational transition by providing severance pay for Tier 2 executives covered by this
Plan whose employment is terminated under conditions set forth in this Plan.

	2.	 	Application of Plan

This Plan, which was initially effective October 1, 1997, is amended and restated in the
form of this document effective February 22, 2011. Any termination of employment of a Tier
2 executive that has an Effective Date (as defined in Section 3 below) on or after February
22, 2011 shall be governed exclusively by the terms of the Plan as amended and restated
herein, and the terms of any Plan as previously applicable shall be of no effect with
respect to such a termination except where a separation agreement and general release had
been previously executed. A Covered Employee who is party to a Key Executive Employment
Protection Agreement with the Company shall be covered under this Plan only with respect to
an Effective Date which occurs prior to a Change of Control as defined in Section 11,
provided that such a Covered Employee will also become covered under this Plan with respect
to an Effective Date that occurs on or after a Change of Control as of such time as the
Covered Employee’s Key Executive Employment Protection Agreement ceases to be in effect.

	3.	 	Covered Employees

You are a Covered Employee under this Plan if, on your last day actively at work (the
“Effective Date”), you are an “Employee” (as defined below) who (1) qualifies as an
“Eligible Employee” (as described in Section 4 below), (2) is paid on a salaried basis, and
(3) is identified as a Tier 2 executive whom the Plan Administrator has approved for
participation in this Plan. A person who is on an authorized leave of absence, paid or
unpaid (including medical leave of absence), of not more than twenty-six (26) weeks and who
would otherwise qualify as a Covered Employee, but for being on leave of absence, will be
considered a Covered Employee for purposes of this Plan. Notwithstanding the foregoing
provisions of this Section 3, you will be an Eligible Employee hereunder only if you have
agreed to such non-competition, non-solicitation, non-disparagement and other restrictive
covenants as are required to be executed by the Plan Administrator.

For purposes of the Plan, “Employee” means any person regularly employed on the United
States payroll by The Hartford Financial Services Group, Inc, Hartford Fire Insurance
Company, or any of their designated subsidiaries or affiliates which have adopted this Plan
with respect to their employees (collectively, the “Company”), but shall not include any
person who performs services for the Company as an independent contractor or under any other
non-employee classification, or who is classified by the Company as, or determined by the
Company to be, an independent contractor.

 

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	4.	 	Severance Pay Upon Termination of Employment

If you are a Covered Employee and the Company terminates your employment and you sign a
Separation and Release Agreement, as described in Section 12, acceptable to the Company, you
will be eligible to receive severance benefits in accordance with the terms of this Plan
except if:

(1) you are terminated for misconduct or other disciplinary action, which by way of
example may include, but is not limited to, the following: serious violations of
Company policies; violation of the Company’s Code of Ethics and Business Conduct, or
any confidentiality agreement or other similar policy or undertaking of the Company;
statements by you, either oral or written, that are false or misleading or that
damage or have the potential to damage the Company; violation of any covenant or
restriction applicable to you; or any Company-initiated termination for cause or for
actions that the Company deems to be immoral, unethical, inimical to the best
interests of the Company, or illegal;

(2) provided that the Effective Date is prior to a Change of Control as defined in
Section 11, you are under investigation, at the time severance pay would otherwise
be due, for misconduct deemed by management to be a serious violation of the
Company’s policies or its Code of Ethics and Business Conduct;

(3) you refuse a Comparable Position offered as alternative employment with the
Company. For purposes of this Plan, “Comparable Position” shall mean a position
with materially the same base salary rate and annual incentive opportunity with
similar duties, or having different duties that, in management’s judgment, you are
able to perform and are consistent with your experience, and that either is located
within a 50-mile radius of the previous position’s location or does not entail a
substantially longer commute from your home;

(4) you terminate employment with the Company prior to the date selected by the
Company as your last day of active employment;

(5) you are terminated while on an approved leave of absence (paid or unpaid) after
26 weeks of such leave (note: there are no unapproved leaves);

(6) you are terminated following acceptance or refusal of employment or continued
employment in connection with any sale, divestiture or outsourcing described in
Section 10;

(7) you remain covered by a prior individual written employment contract or other
written agreement with the Company (other than a Key Executive Employment Protection
Agreement) that provides for the payment of severance benefits (in which case
severance benefits, if any, shall be determined in accordance with that agreement);

 

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(8) except as provided in subparagraph (3) above or in Section 11 with respect to a
Termination for Good Reason, you initiate termination of employment for any reason,
including resigning, retiring or failing to return to work immediately following the
expiration of any leave of absence;

(9) your employment terminates as a result of your death, or as a result of your Disability.
For this purpose, a termination as a result of Disability is (i) a termination of your
employment by the Company as a result of a determination by the Board or the appropriate
committee thereof that you are incapable of substantially fulfilling your positions, duties,
responsibilities and obligations on account of physical, mental or emotional incapacity
resulting from injury, sickness or disease for a period of (A) at least four consecutive
months, or (B) more than six months in any twelve month period, or (ii) a termination of
your employment on account of total disability that results in your qualifying for benefits
under the Company’s Long Term Disability Plan for Salaried Employees; or

(10) your employment terminates due to your mandatory retirement at or after your
65th birthday, provided that such mandatory retirement would not violate any
applicable provision of the Federal Age Discrimination in Employment Act of 1967, as
amended.

	5.	 	Schedule of Severance Pay

You will be eligible to receive severance benefits under this Section if you are a Covered
Employee and the Company terminates your employment other than in any of the circumstances
described in subparagraphs (1) through (10) of Section 4. In such circumstances, but
subject to your entering into (and not revoking) a Separation and Release Agreement, as
described in Section 12, you will receive severance benefits equal to a number of months of
your Base Pay determined as follows:

	 	 	 	 	 
	 	 	Number of Months	 
	Years of Service	 	of Base Pay	 
	Less than 4 Years of Service
	 	12 months
	4 Years of Service
	 	13 months
	5 Years of Service
	 	14 months
	6 Years of Service
	 	15 months
	7 Years of Service
	 	16 months
	8 Years of Service
	 	17 months
	9 Years of Service
	 	18 months
	10 Years of Service
	 	19 months
	11 Years of Service
	 	20 months
	12 Years of Service
	 	21 months
	13 Years of Service
	 	22 months
	14 Years of Service
	 	23 months
	15 or more Years of Service
	 	24 months

 

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“Base Pay” means your annual base salary at the Effective Date, excluding all bonus and
incentive compensation and any special remuneration, divided by twelve (12) months.

“Years of Service” shall mean the total number of completed years of employment measured
from your Company Service Date to your Effective Date, rounded to the nearest whole year.
Your “Company Service Date” is the date used to determine your eligibility for vesting under
the applicable Company retirement plan in effect on the Effective Date.

The severance payment provided shall be in addition to any Base Pay earned, but unpaid, for
services rendered to the Company on or prior to the Effective Date, plus any paid time off
accrued as of such date.

	6.	 	Pro-Rata Annual Bonus and Treatment of Long Term Incentives 

If you receive severance pay in accordance with Section 5, you will also be eligible to
receive a pro-rata annual bonus under the applicable Company annual incentive plan for the
year in which the Effective Date occurs, payable as described in Section 8. The amount of
the pro-rata annual bonus shall be determined at the Company’s discretion, based on Company
and individual performance for the year in which the Effective Date occurs, provided that,
in respect of a Termination for Good Reason or an involuntary termination by the Company
pursuant to Section 11, in no event shall the pro-rata annual bonus be less than a pro-rata
bonus payable at the same percentage of the target level of payout as is generally
applicable to executives whose employment did not terminate.

If you receive severance pay in accordance with Section 5, you will also vest pro-rata in
any outstanding unvested long term incentives, including stock options, performance shares,
performance units, restricted stock and restricted stock unit awards, provided that at least
one full year of the performance or restriction period of the applicable award has elapsed
as of the Effective Date and such vesting is not prohibited by applicable law, including
guidance under the Emergency Economic Stabilization Act of 2008, as amended, applicable to
entities that received financial assistance under the Troubled Asset Relief Program (TARP).
The timing of the payment of such awards will be as set forth in the 2010 Incentive Stock
Plan or other applicable long term incentive plan or the applicable award agreement under
such plan. The vesting of any such awards will be determined in accordance with the terms
of the applicable long term incentive plan or the administrative rules thereunder, if such
plan or rules provide for more favorable vesting than described herein.

 

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	7.	 	Notice or Pay in Lieu of Notice

Except as provided in this Plan, you shall not be entitled to any notice of termination or
pay in lieu thereof. At the sole discretion of the Company, notice may be provided.

	8.	 	Payment of Severance Pay and Pro-Rata Annual Bonus

Any severance pay provided to you under this Plan shall be paid in a lump sum. Severance
pay shall be paid within 60 days of the Effective Date.

Any pro-rata annual bonus payable in accordance with Section 6 shall be paid no later than
the same time as similar awards are paid to other executives participating in the plans or
programs under which the awards are paid, but in no event later than March 15 of the
calendar year following the calendar year in which the Effective Date occurs, provided
that, if you would have been a “covered employee” as defined in Section 162(m) of the
Internal Revenue Code (the “Code”) for the calendar year in which the Effective Date occurs
but for the termination of your employment, the pro-rata annual bonus shall be payable to
you only if, when, and to the extent that the Compensation and Management Development
Committee of the Board of Directors of The Hartford Financial Services Group, Inc.,
certifies that the performance goals applicable to the annual bonus, as preestablished by
such Committee in accordance with Section 162(m) of the Code, have been attained.

As provided in Section 4(2), prior to a Change of Control as defined in Section 11, any
severance pay or pro rata annual bonus that would otherwise be payable in accordance with
Section 5 or 6 shall not be payable under the Plan to an employee who is under investigation
for any such misconduct at the time payment would otherwise be due.

In the event of your death after the Effective Date but prior to your receipt of severance
pay, the payment that would otherwise have been due to you shall be paid within 30 days of
your death, subject to applicable law, to your spouse, if any, or if you are not married, to
your estate.

	9.	 	Employee Benefit Plan Coverage While Receiving Severance Pay

Except as may otherwise be specifically provided by the applicable employee benefit plan, as
it may be amended from time to time, severance pay and a pro-rata annual bonus and any other
payment made by the Company after the Effective Date shall not be taken into account for any
purpose under any employee benefit plan of the Company, including but not limited to The
Hartford Investment and Savings Plan, The Hartford Excess Savings Plan, The Hartford
Retirement Plan for U.S. Employees and The Hartford Excess Pension Plan II.

 

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If you receive severance pay under Section 5, then, provided that the following provision is
not deemed discriminatory under applicable law, until the end of the month in which the
one-year anniversary of the Effective Date occurs, the Company will reimburse you for the
cost of COBRA continuation coverage for you and your eligible dependents under the medical
and dental benefit plans of the Company or its affiliates in which you and such dependents
were participating as of the Effective Date. The reimbursement will be for the excess of
the amount that you pay for such COBRA continuation coverage over the amount that you would
pay for such coverage if you were still in the employ of the Company; provided that the reimbursement will be paid only so long as you otherwise continue to be eligible for such
COBRA continuation coverage in accordance with the terms of the Company’s medical and dental
benefit plans and are not eligible for comparable coverage under the plan of a subsequent
employer. An initial reimbursement shall be made during the 10 calendar days following six
months from the Effective Date for payments made through that date; a second and final
reimbursement, if necessary, shall be made within 10 days following the one-year anniversary
of the Effective Date for any additional reimbursement due; provided that for purposes of
this sentence, the Effective Date shall be deemed to occur at such time as you have also had
a separation from service, as determined in accordance with any policies or practices that
the Company shall adopt in accordance with, or as otherwise determined pursuant to, Section
409A of the Code and the regulations and guidance promulgated thereunder.

If you receive severance pay under Section 5, you will also be entitled to outplacement
services, provided by the Company or its designee at the Company’s expense, for a period of
12 months or such lesser period as you may require such services; such outplacement services
to start within three months of the Effective Date.

	10.	 	Sale, Divestiture, Outsourcing, Closure or Relocation

(A) If the Company or a subsidiary, affiliate, division, department, business or function
of the Company or a portion thereof at which you are employed is sold, divested or
outsourced in a transaction that does not qualify as a Change of Control under Section 11
hereof, you are eligible to receive severance benefits under Section 5 and a pro-rata annual
bonus in accordance with Section 6 of this Plan provided that:

(1) you are a Covered Employee at the time of the transaction whose employment with the
Company terminates as a result of the transaction,

(2) you are not offered a Comparable Position with the Company, the acquirer, the vendor or
the divested unit,

(3) you do not decline an interview or an invitation to apply for a Comparable Position or
to determine the availability of a Comparable Position with the Company, the acquirer, the
vendor or the divested unit (except where the Plan Administrator determines that business
circumstances warrant otherwise),

(4) you do not accept a position with the Company, the acquirer, the vendor or the divested
unit, and

(5) you are not otherwise ineligible for severance pay for any of the reasons described in
Section 4 of this Plan.

 

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If you continue employment with the Company or are hired on or immediately following the
Effective Date by the acquirer, vendor or the divested unit, then severance payments and a
pro-rata annual bonus will not be provided under this Plan. If you are hired after the
Effective Date by the acquirer, vendor or the divested unit, then any severance payment or
pro-rata annual bonus will be made only so long as your employment is not related to or in
support of the sold, divested or outsourced business or operations.

The provisions of this Section shall apply to all sales, divestitures and outsourcings
(whether accomplished as sales of assets, sales of corporate entities, service agreements or
any other method), unless such sale, divestiture or outsourcing qualifies as a Change of
Control as defined in Section 11 hereof, in which event the provisions of Section 11 shall
apply.

(B) If the entire Company or the portion of the Company where you are employed is closed or
relocated and you are not offered a Comparable Position by the Company, then you are
eligible to receive severance pay under Section 5 (provided that you are not otherwise
ineligible for severance pay for any of the reasons described in Section 4 of this Plan).
You will not receive severance pay or a pro-rata annual bonus if you are offered a
Comparable Position with the Company or if you accept a non-comparable position with the
Company.

	11.	 	Severance Pay in the Event of a Change of Control

(A) Post-Change of Control Severance Pay. In the event of a Change of Control
(as defined below), if, within the two-year period following such Change of Control, you are
a Covered Employee whom the Plan Administrator has approved for participation in this Plan
or whom the Plan Administrator had approved for participation in this Plan as of immediately
prior to the Change of Control, and (i) you are involuntarily terminated by the Company for
any reason other than in a Termination For Cause (as defined below), a termination due to
death or a termination on account of total disability that results in your qualifying for
benefits under the Company’s Long Term Disability Plan for Salaried Employees, or (ii) you
voluntarily terminate employment with the Company in a Termination for Good Reason (as
defined below), then you shall receive severance pay and be eligible for a pro-rata annual
bonus as provided in Sections 5 and 6, payable as described in Section 8, except that, in
such a case, the amount of severance pay shall be equal to two times your Base Pay rather
than the amount provided for in Section 5. For this purpose, when determining the amounts
payable, the Base Pay and bonus opportunity taken into account shall not be less than your
greatest Base Pay and bonus opportunity in effect at any time since the date immediately
prior to the Change of Control. Following a Change of Control, the term “Company” shall also
include any successor in interest to any of the entities included in the definition of
Company immediately prior to the Change of Control and any affiliate of such successor
entity by which a person who was a Covered Employee immediately prior to the Change of
Control is employed.

 

7

 

(B) Reduction of Severance Pay to Reduced Amount in Certain Circumstances.

(i) Determination of Existence of Reduced Amount. Notwithstanding anything herein
to the contrary, in the event that Deloitte and Touche or such other nationally
recognized public accounting firm as is designated by the Company prior to the
Change of Control (the “Accounting Firm”) shall determine that your receipt of
payments hereunder would subject you to tax under Section 4999 of the Code, the
Accounting Firm shall determine whether some amount of the aggregate payments meets
the definition of Reduced Amount (defined below). All determinations made by the
Accounting Firm under this Section shall be binding upon the Company and you and
shall be made within 60 days of your termination of employment.

(ii) Consequences of Determination of Existence of Reduced Amount. If the
Accounting Firm determines that there is a Reduced Amount as provided in the
preceding paragraph, then the aggregate severance payments shall be reduced to such
Reduced Amount, provided that the net after-tax amount that the Accounting Firm
projects that you will receive, if such reduction is made, is not less than the net
after-tax amount that the Accounting Firm projects that you will receive if such
reduction is not made.

(iii) Consequences of Overpayment or Underpayment of Amounts. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm under Section 11(B)(i) hereof, it is
possible that amounts will have been paid or distributed by the Company pursuant to
the Plan that should not have been so paid or distributed (“Overpayment”), or that
additional amounts that will have not been paid or distributed by the Company
pursuant to this Plan that could have been so paid or distributed (“Underpayment”),
in each case, consistent with the calculation of the Reduced Amount hereunder. In
the event that the Accounting Firm, based upon the assertion of a deficiency by the
Internal Revenue Service against either the Company or you that the Accounting Firm
believes has a high probability of success, determines that an Overpayment has been
made, any such Overpayment paid or distributed by the Company shall be deemed for
all purposes to be a loan to you made on the date of receipt of the Overpayment,
which you shall have an obligation to repay to the Company on demand, together with
interest on such amount at the applicable federal rate provided for in Section
7872(f)(2) of the Code. In the event that the Accounting Firm, based upon
controlling precedent or substantial authority, determines that an Underpayment has
occurred, any such Underpayment shall be promptly paid by the Company together with
interest at the applicable federal rate provided for in Section 7872(f)(2) of the
Code.

(iv) Fees and Expenses of Accounting Firm. All fees and expenses of the Accounting
Firm in implementing the provisions of this Section 11(B) shall be borne by the
Company.

 

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(C) Definitions.

For purposes of this Section 11:

“Change of Control” means an event that qualifies as a Change of Control
under The Hartford 2010 Incentive Stock Plan, as it may be amended from time to
time.

“Termination For Good Reason” means a termination of your employment due to
the occurrence of any of the following after the occurrence of a Change of Control,
where notice of termination is provided as described below:

(i) (A) the assignment to you of any duties inconsistent in any material adverse
respect with your position, duties, authority or responsibilities, or (B) any other
material adverse change in such position, including titles, authority or
responsibilities;

(ii) a material reduction in your Base Pay or annual bonus opportunity;

(iii) the Company’s requiring you to be based at any office or location more than 50
miles from the location at which you performed your services immediately prior to
the Change of Control (provided that such change of office or location also entails
a substantially longer commute from your home), except for travel reasonably
required in the performance of your responsibilities;

(iv) any failure by the Company to obtain the assumption and agreement to perform
the provisions of this Plan by a successor; or

(v) a Termination asserted by the Company to be For Cause that is subsequently
determined in a proceeding pursuant to Section 16(A) hereof not to constitute a
Termination For Cause.

Except with respect to an event described in subclause (v), you must provide written
notice of Termination For Good Reason to the Plan Administrator within 180 days of
your having actual knowledge of the events giving rise to such Termination For Good
Reason, which sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for Termination For Good Reason, along with the applicable date of
termination if other than the date of receipt of such notice (which date shall not
be more than 15 days after the giving of such notice), provided that your failure to
set forth in the notice of termination any fact or circumstance that contributes to
a showing of Good Reason shall not waive any right you have or preclude you from
asserting such fact or circumstance in enforcing your rights hereunder.
Notwithstanding the foregoing, a termination of your employment shall not be treated
as a Termination For Good Reason if (i) you have consented in writing to the occurrence of the event giving rise to the claim of Termination For Good Reason, or
(ii) if you have delivered a notice of termination based on a claim of Termination
For Good Reason to the Company, and the facts and circumstances specified therein as
providing a basis for such Termination For Good Reason are cured by the Company
within 10 days of its receipt of such notice of termination.

 

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“Net After-Tax Receipt” means the Present Value of a payment net of all
taxes imposed with respect thereto under Sections 1 and 4999 of the Code, under
applicable state and local laws, and for Social Security, Medicare or other
employment tax purposes, determined by applying the highest marginal rate under
Section 1 of the Code and under state and local laws that applied to your taxable
income for the immediately preceding taxable year, or such other rate(s) as you
shall certify as likely to apply to you in the relevant tax year(s).

“Present Value” means such value as determined in accordance with Sections
280G(b)(2)(A)(ii) and 280G(d)(4) of the Code.

“Reduced Amount” means the smallest amount of Plan payments that (i) has a
Present Value that is less than the Present Value of all Plan payments, and (ii)
results in aggregate Net After-Tax Receipts for all payments that are greater than
the Net After-Tax Receipts for all payments that would result if the aggregate
Present Value of Plan payments were any other amount that is less than the Present
Value of all Plan payments.

“Termination For Cause” For purposes of this Section 11 only, a Termination
For Cause is limited to the following: a termination of your employment due to (1) a
felony conviction; (2) an act or acts of dishonesty or gross misconduct on your part
that result or are intended to result in damage to the Company’s business or
reputation; or (3) repeated violations of your obligations to devote your full
attention during normal business hours to the business and affairs of the Company
and to use your best efforts to perform faithfully and efficiently the
responsibilities assigned to you except for time away from work authorized by
Company policy or state or federal law, which violations are demonstrably willful
and deliberate on your part and which result in damage to the Company’s business or
reputation.

 

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	12.	 	Separation and Release Agreement

You must accept the terms of a separation agreement, including but not limited to a release
of all claims that you may have against the Company, the Company’s directors, officers,
employees and employee benefit plans, in a form provided by the Plan Administrator or
designee (the “Separation and Release Agreement”), as a condition for the payment of any
severance benefits under this Plan. In no event shall the terms and conditions of a
Separation and Release Agreement required following a Change of Control be significantly
less favorable to you than the terms and conditions of the form of Separation and Release
Agreement customarily used by the Company prior to the Change of Control. You have no
vested right to receive severance benefits until you sign the Separation and Release
Agreement and the expiration of any revocation period occurs. You must sign and return the
Separation and Release Agreement no later than the date specified in that Agreement.

	13.	 	Offset

Any severance pay provided to you under this Plan may be offset by reducing such amount by
any severance pay, termination pay or similar pay or allowance that you receive or are
entitled to receive (i) under any other Company plan, policy, practice, program or
arrangement, other than a Company retirement plan; or (ii) by virtue of any law, custom or
practice, excluding any unemployment compensation that you may receive as a state
unemployment award.

Any severance pay provided to you under this Plan shall also be offset by reducing such
severance pay by any severance pay, termination pay or similar pay or allowance you received
as a result of any prior termination of employment with the Company. Any severance pay and
any notice pay provided to you under this Plan shall be offset by reducing such severance
pay and notice pay by any payments made to you by the Company pursuant to the Worker
Adjustment and Retraining Notification Act (“WARN”) and any similar federal, state or local
law.

Any severance pay provided to you under this Plan shall be offset by reducing such severance
pay by any payment made or anticipated to be made to you under any Company or statutory
disability plan, policy, practice, program or arrangement after the Effective Date.

Any payment to you is subject to recovery or “clawback” by the Company if the payment is
based on materially inaccurate financial statements or any other materially inaccurate
performance metric criteria, or as otherwise required by applicable law. Prior to a Change
of Control, (1) if the Company determines that you have taken action, or failed to act, in a
manner which is inimical to the best interests of the Company, the Company may, in its sole
discretion, not pay any amount which has not then been paid to you from this Plan and, in
addition, may recover or “clawback” any amount which has already been paid to you in
accordance with this Plan, and (2) any severance pay provided to you under this Plan shall
be offset by reducing such severance pay by any amount that you owe to the Company,
including but not limited to any amounts owed as a result of overpayments of disability benefits, wages, bonuses or incentive compensation. Additionally, prior to a Change of
Control, any severance pay otherwise due to you may be offset by any costs to the Company in
connection with any sums for which you are personally responsible.

 

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	14.	 	Administration of Plan

Responsibility for administration of this Plan rests with the Company’s Executive Vice
President, Human Resources (or other individual with similar responsibilities) or his or her
designee (“Plan Administrator”).

The Plan Administrator shall have the exclusive right to interpret this Plan, adopt any
rules and regulations for carrying out this Plan as may be appropriate and decide any and
all matters arising under this Plan, including, but not limited to, the right to determine
appeals. Subject to applicable federal and state law, all interpretations and decisions by
the Plan Administrator shall be final, conclusive and binding on all parties affected
thereby. Any claim, complaint, dispute, question, contest, controversy or issue for
determination (collectively “claim”) in connection with the operation, interpretation or
administration of this Plan must first be appealed to the Plan Administrator according to
the procedures set forth below. Only if you have exhausted such administrative appeal
process and have received an adverse ruling, in whole or in part, from the Plan
Administrator on one or more claims may you proceed with arbitration pursuant to Section
16(A) hereof.

If you believe you are entitled to, but do not receive, severance pay, you may make a claim
for severance pay by submitting a written request to the Company’s Senior Vice President,
Total Rewards and HR Operations within 60 days after your Effective Date. If your claim is
denied, in whole or in part, the Senior Vice President, Total Rewards and HR Operations or
his or her designee will notify you of the Plan’s denial not later than 90 days after your
claim was received, unless the Senior Vice President, Total Rewards and HR Operations or his
or her designee determines that special circumstances require an extension of time for
processing the claim. If the Senior Vice President, Total Rewards and HR Operations or his
or her designee determines that special circumstances require an extension of time for
processing your claim, you will receive written notice of the extension prior to the end of
the initial 90-day period. In no event will such extension end later than 90 days from the
end of the initial period. You will be notified of the special circumstances requiring an
extension of time and the date by which the Plan expects to render the benefit
determination. If your claim is denied, you will receive notification from the Senior Vice
President, Total Rewards and HR Operations or his or her designee, which will include: (i)
the specific reason or reasons why the claim was denied, (ii) reference to the specific plan
provisions on which the determination is based; (iii) a description of any additional
material or information necessary for you to perfect your claim and an explanation of why
such material or information is necessary; and (iv) a description of the Plan’s review
procedures and the time limits applicable to such procedures, including a statement of your right to bring a civil action
following a denial on review.

 

12

 

If you wish to appeal a denial of your claim, you must submit a written appeal to the Plan
Administrator within 60 days of the date you receive the denial of your claim. You may
include with your appeal written comments, documents, records, and other information
relating to your claim for severance pay. Additionally, you will be provided, upon request
and free of charge, reasonable access to, and copies of, all documents, records, and other
information relevant to your claim for benefits. The review of your appeal will take into
account all comments, documents, records, and other information you submit relating to your
claim, regardless of whether such information was submitted or considered in the initial
benefit determination.

The Plan will notify you, within 60 days after it receives your request for review of the
denial, of the Plan’s benefit determination on review. If the Plan Administrator determines
that an extension of time for processing is required, written notice of the extension will
be furnished to you prior to the end of the initial 60-day period. In no event will such
extension end later than 60 days from the end of the initial period. You will be notified
of the special circumstances requiring an extension of time and the date by which the Plan
expects to render the determination on review.

If your appeal is denied, the notification the Plan Administrator provides to you will
include: (i) the specific reason or reasons why the appeal was denied, (ii) reference to the
specific Plan provisions on which the determination is based; (iii) a description of any
additional material or information necessary for you to perfect the claim and an explanation
of why such material or information is necessary; (iv) a description of the Plan’s review
procedures and the time limits applicable to such procedures, including a statement of your
right to bring a civil action under ERISA following an adverse determination on review.

	15.	 	Termination or Amendment

The Plan Administrator shall have the power to make amendments to the Plan that do not
involve a material cost to the Company or are required by applicable law. Any other
amendments to the Plan shall be made by the Board of Directors of The Hartford Financial
Services Group, Inc., or the Compensation and Management Development Committee thereof. The
Company reserves the right, in its sole discretion, to terminate, suspend, amend or modify
this Plan (“Plan Change”) in whole or in part at any time without prior notice.
Notwithstanding anything in this Plan to the contrary, the Plan shall not be amended,
modified, suspended or terminated following a Change of Control or during the period in
which a Change of Control (as defined in The Hartford 2010 Incentive Stock Plan, as it may
be amended from time to time) is threatened, except that the Plan Administrator may amend
this Plan during such period or following a Change of Control, or at any other time, in such
manner as the Plan Administrator deems

 

13

 

necessary or advisable, in his or her reasonable judgment, (i) to comply with a change in law or to
avoid any payments hereunder being subject to an additional tax under Section 409A of the
Code, or (ii) so long as such amendment does not adversely affect (A) the eligibility of any
Eligible Employee to receive benefits hereunder or (B) the amount or type of benefits that
might become, or the time at which such benefits would be, payable hereunder to any such
Eligible Employee. This Plan is intended to comply with Section 409A of the Code, and no
action taken by the Company shall be construed in a manner that would result in the
imposition of an additional tax on executives under Section 409A of the Code. For purposes
of this Section, a Change of Control shall be deemed to be threatened for the period
beginning on the date of any Potential Change of Control (as defined in The Hartford 2010
Incentive Stock Plan, as it may be amended from time to time), 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 of Directors of The Hartford
Financial Services Group, Inc., or the appropriate committee thereof determines in good
faith that a Change of Control is no longer threatened.

	16.	 	Miscellaneous 

(A) Arbitration. Any claim arising under or in connection with this Plan that,
following exhaustion of the administrative appeal process referenced in Section 14 hereof,
has yet to be resolved in whole or in part, shall be resolved exclusively by binding
arbitration. Such arbitration shall be held in the city of Hartford, Connecticut, and shall
be conducted in accordance with the Employment Arbitration Rules then pending of the
American Arbitration Association (“AAA”), and otherwise in accordance with the principles
that would be applied by a court of law or equity. The arbitrator shall be acceptable to
both you and the Company. If you and the Company cannot agree on an acceptable arbitrator,
the claim shall be heard by a panel of three arbitrators, with one each appointed by you and
the Company and the third appointed by the other two arbitrators. The award rendered by the
arbitrator (or arbitrators) will be final and determinative as to any and all issues
submitted for arbitration, and a judgment may be entered on any award by any state or
federal court having jurisdiction over the parties or their respective property. You and the
Company shall be jointly and equally responsible for all arbitration fees assessed by the
AAA, and you and the Company shall each be responsible for your respective attorney’s fees
and related expenses; provided that, should the claim relate to circumstances occurring on
or after the date of a Change of Control, if the arbitrator (or arbitrators) shall in the
award determine one or more material issues in dispute in your favor, then the Company shall
pay your share of any expenses of the arbitration and your reasonable attorney’s fees and
related expenses (or cause such fees and expenses to be paid), upon presentation of proof of
such fees and expenses in a form acceptable to the Company, and as to any reasonable fees
and related expenses that you have already paid, the Company shall add to the reimbursement
payment an amount for simple interest thereon from the date such expense was paid by you at
the 90-day United States Treasury Bill rate as in effect from time to time, compounded
annually.

 

14

 

(B) Unfunded. Benefits under this Plan are paid for entirely by the Company from
its general assets.

(C) Withholding. Any payments provided for herein shall be reduced by any amounts
required to be withheld by the Company from time to time under applicable Federal, State or
local income or employment tax laws or similar statutes or other provisions of law then in
effect.

(D) Section Headings. The section headings contained in this Plan are included
solely for convenience of reference and shall not in any way affect the meaning of any
provision of this Plan.

	17.	 	Other Important Information

(A) Notice

This Plan is not a contract of employment. It does not guarantee your employment for any
specified period and does not limit the right of the Company to terminate your employment at
any time for any reason. Employment with the Company is terminable at will.

Except as otherwise provided in a written agreement with the Company, any employee retains
the right to terminate his or her employment at any time, with or without notice, and with
or without cause. Likewise, the Company can terminate the employment of any employee at any
time, with or without notice, and with or without cause, subject to applicable law.

No supervisor or manager has any authority to enter into an employment agreement, written or
oral, or to make any agreement or representations contrary to the preceding paragraph,
unless it is authorized by the Chairman of The Hartford Financial Services Group, Inc., and
such agreement is in writing. Further no document, communication or publication of The
Hartford Financial Services Group, Inc., the Company, or any affiliate of either of the
foregoing should be understood as, or construed as, making such an agreement or extending
such a representation.

 

15Exhibit 10.09

Exhibit 10.09

THE HARTFORD 2010 INCENTIVE STOCK PLAN

1. Purpose

The purpose of the Plan is to motivate and reward superior performance on the part of
Key Employees of The Hartford Financial Services Group, Inc. (“The Hartford” or “the
Company”) and its subsidiaries and affiliates and to thereby attract and retain Key
Employees of superior ability. In addition, the Plan is intended to further opportunities
for stock ownership by such Key Employees and Directors in order to increase their
proprietary interest in The Hartford and, as a result, their interest in the success of the
Company. Awards will be made, in the discretion of the Committee, to Key Employees
(including officers and directors who are also Key Employees) whose responsibilities and
decisions directly affect the performance of any Participating Company and its subsidiaries,
and also to Directors. Such incentive awards may consist of Options, Rights, Performance
Shares, Restricted Stock, Restricted Units or any combination of the foregoing, as the
Committee may determine.

2. Definitions

When used herein, the following terms shall have the following meanings:

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

“Award” means an award granted to any Key Employee or Director in accordance with the
provisions of the Plan in the form of Options, Rights, Performance Shares, Restricted Stock
or Restricted Units, or any combination of the foregoing, as applicable.

“Award Document” means the written notice, agreement, or other document evidencing each
Award granted under the Plan. Such Award Document may be in an electronic, internet,
intranet or other non-paper form, including any acceptance thereof and actions thereunder by
an Award recipient.

“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.

 

 

 

“Beneficiary” means the beneficiary or beneficiaries designated pursuant to the Plan to
receive the amount, if any, payable under the Plan upon the death of an Award recipient.

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

“Change of Control” means the occurrence of an event defined in Section 9 of the Plan.

“Code” means the Internal Revenue Code of 1986, as amended. For purposes of this Plan,
references to sections of the Code shall be deemed to include references to any applicable
regulations thereunder and any successor or similar provision.

“Committee” means the Compensation and Personnel Committee of the Board or such other
committee as may be designated by the Board to administer the Plan. If the Committee does
not exist or cannot function for any reason, the Board may take any action under the Plan
that would otherwise be the responsibility of the Committee.

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

“Director” means a member of the Board who is not an employee of any Participating
Company.

“Dividend Equivalents” means an amount credited with respect to an outstanding
Restricted Unit equal to the cash dividends paid or property distributions awarded upon one
share of Stock. Any Dividend Equivalents on unearned performance-based Awards will be
accrued, but will only be paid as and when the underlying performance-based Awards are
vested and payable.

“Eligible Employee” means an Employee as defined in the Plan; provided, however, that
except as the Board or the Committee, pursuant to authority delegated by the Board, may
otherwise provide on a basis uniformly applicable to all persons similarly situated,
“Eligible Employee” shall not include any “Ineligible Person,” which includes: (a) a person
who (i) holds a position with the Company’s “HARTEMP” Program, (ii) is hired to work for a
Participating Company through a temporary employment agency, or (iii) is hired to a position
with a Participating Company with notice on his or her date of hire that the position will
terminate on a

 

 

 

certain date; (b) a person who is a leased employee (within the meaning of
Code Section 414(n)(2)) of a
 Participating Company or is otherwise employed by or through a temporary help firm,
technical help firm, staffing firm, employee leasing firm, or professional employer
organization, regardless of whether such person is an Employee of a Participating Company,
and (c) a person who performs services for a Participating Company as an independent
contractor or under any other non-employee classification, or who is classified by a
Participating Company as, or determined by a Participating Company to be, an independent
contractor, regardless of whether such person is characterized or ultimately determined by
the Internal Revenue Service or any other Federal, State or local governmental authority or
regulatory body to be an employee of a Participating Company or its affiliates for income or
wage tax purposes or for any other purpose.

Notwithstanding any provision in the Plan to the contrary, if any person is an
Ineligible Person, or otherwise does not qualify as an Eligible Employee, or otherwise is
ineligible to participate in the Plan, and such person is later required by a court or
governmental authority or regulatory body to be classified as a person who is eligible to
participate in the Plan, such person shall not be eligible to participate in the Plan,
notwithstanding such classification, unless and until designated as an Eligible Employee by
the Committee, and if so designated, the participation of such person in the Plan shall be
prospective only.

“Employee” means any person regularly employed by a Participating Company, but shall
not include any person who performs services for a Participating Company as an independent
contractor or under any other non-employee classification, or who is classified by a
Participating Company as, or determined by a Participating Company to be, an independent
contractor.

“Fair Market Value,” unless otherwise indicated in the provisions of this Plan, means a
price that is based on the opening, closing, actual, high, low, or average selling prices of
one share of Stock reported on the New York Stock Exchange or other established stock
exchange (or exchanges) on the applicable date, the preceding trading day, the next
succeeding trading day, or an average of trading days, as determined by the Committee in its
discretion. Unless the Committee determines otherwise, such Fair Market Value shall be
deemed, as of any date, to be equal to the reported closing price for one share of Stock on
the New York Stock Exchange or, if no sales of Stock have taken place on such date, the
reported closing price on the most recent date on which selling prices were quoted, the
determination to be made in the discretion of the Committee.

“Formula Price” means (i) in the case of the exercise of any Right or Option, the Fair
Market Value of the Stock at the time of such exercise and (ii) in the case of any other
Award, the highest of: (a) the highest composite daily closing price of the Stock during
the period beginning on the 60th calendar day prior to the Change of Control and
ending on the date of such Change of Control, (b) the highest gross price paid for the Stock
during the same period of time, as reported in a report on Schedule 13D filed with the
Securities and Exchange Commission, or (c) the highest gross price paid or to be paid for a
share of Stock (whether by way of exchange, conversion, distribution upon merger,
liquidation or otherwise) in any of the transactions set forth in Section 9 of the Plan as
constituting a Change of Control.

 

 

 

“Incentive Stock Option” means a stock option qualified under Section 422 of the Code.

“Key Employee” means an Eligible Employee (including any officer or director who is
also an Eligible Employee) whose responsibilities and decisions, in the judgment of the
Committee, directly affect the performance of the Company and its subsidiaries.

“Option” means an option awarded under Section 5 of the Plan to purchase Stock of the
Company, which option may be an Incentive Stock Option or a non-qualified stock option.

“Participating Company” means the Company or any subsidiary or other affiliate of the
Company; provided, however, for Incentive Stock Options only, “Participating Company” means
the Company or any corporation which at the time such Option is granted qualifies as a
“subsidiary” of the Company under Section 424(f) of the Code.

“Performance Share” means a performance share awarded under Section 6 of the Plan.

“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: (a) the Company, any subsidiary of the Company or any other Person controlled by
the Company, (b) any trustee or other fiduciary holding securities under any employee
benefit plan of the Company or of any subsidiary of the Company, or (c) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of securities of the Company.

“Plan” means The Hartford 2010 Incentive Stock Plan, as the same may be amended,
administered or interpreted from time to time.

“Plan Year” means the calendar year.

“Potential Change of Control” means the occurrence of an event defined in Section 9 of
the Plan.

“Restricted Stock” means Stock awarded under Section 7 of the Plan subject to such
restrictions as the Committee deems appropriate or desirable.

“Restricted Unit” means a contractual right awarded under Section 7 of the Plan to
receive pursuant to the Plan one share of Stock at the end of a specified period of time,
subject to such restrictions as the Committee deems appropriate or desirable.

 

 

 

“Restriction Period” means, in the case of Performance Shares, Restricted Stock or
Restricted Units the period established by the Committee pursuant to Section 6 or 7, as
applicable, during which shares of Stock or other rights of the recipient of such an Award
(or his or her permissive assigns) remain subject to forfeiture pending completion of a
period of service or such other criteria or conditions as the Committee shall specify.

“Retirement” means satisfaction of the requirements for early or normal
retirement under the final average pay formula of the Retirement Plan (assuming such Key
Employee were covered under the final average pay formula of the Retirement Plan), provided
such event results in such Key Employee’s separation from employment with the Company.

“Retirement Plan” means The Hartford Retirement Plan for U.S. Employees, as amended
from time to time.

“Right” means a stock appreciation right awarded under Section 5 of the Plan.

“Stock” means the common stock ($.01 par value) of The Hartford.

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

“Third Party Service Provider” means any consultant, agent, advisor, or independent
contractor who renders services to The Hartford that (a) are not in connection with the
offer and sale of The Hartford’s securities in a capital raising transaction, and (b) do not
directly or indirectly promote or maintain a market for The Hartford’s securities.

“Total Disability” means the complete and permanent inability of a Key Employee to
perform all of his or her duties under the terms of his or her employment with any
Participating Company, as determined by the Committee upon the basis of such evidence,
including independent medical reports and data, as the Committee deems appropriate or
necessary.

“Transferee” means any person or entity to whom or to which a non-qualified stock
option has been transferred and assigned in accordance with Section 5(h) of the Plan.
Unless the Committee shall expressly permit otherwise, with respect to any Key Employee or
Director, only (i) the Key Employee’s or Director’s child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, mother-in-law, father-in-law, son-in-law or daughter-in-law
(including adoptive relationships), (ii) trusts for the exclusive benefit of one or more
such persons and/or the Key Employee or Director, and (iii) another entity owned solely by
one or more such persons and/or the Key Employee or Director shall be a Transferee.

 

 

 

3. Shares Subject to the Plan

Subject to adjustments in accordance with Section 13, the aggregate number of shares of
Stock which may be awarded under the Plan shall be subject to a maximum limit applicable to
all Awards for the duration of the Plan (the “Maximum Limit”). The Maximum Limit shall be
18,000,000 shares of Stock, which shall consist of (i) a number of shares of Stock not
previously authorized for issuance under any plan, plus (ii) the number of shares of Stock
remaining available for issuance under The Hartford 2005 Incentive Stock Plan but not
subject to outstanding awards as of March 31, 2010. The maximum number of shares of Stock
with respect to which Awards may be granted under the Plan in the form of Incentive Stock
Options shall be 18,000,000.

Subject to adjustments in accordance with Section 13, and subject to the Maximum Limit
set forth above on the number of Shares that may be awarded in the aggregate under the Plan,
the maximum number of shares that may be awarded to Directors under the Plan shall be
1,000,000 shares of Stock. Additionally, a Director may not be granted an Award covering
more than 50,000 shares of Stock in any Plan Year, except that this annual limit on Director
Awards shall be 100,000 shares of Stock for any Director serving as Chairman of the Board
and provided, however, that in the Plan Year in which an individual is first appointed or
elected as a Director, the limit applicable to such Director shall be increased by 50,000
shares of Stock.

In addition to the foregoing, in any Plan Year: (a) no individual Key Employee may
receive an Award of Options or Rights for more than 2,000,000 shares, and (b) no individual
Key Employee may receive an Award of Restricted Stock, Restricted Units or Performance
Shares for more than 500,000 shares.

Except with respect to shares of Stock equivalent to a maximum of five percent of the
Maximum Limit authorized above in this Section 3, and except as may be provided in Section 9
regarding a Change of Control, any Full Value Awards which vest on the basis of a Key
Employee’s continued employment with the Company shall not provide for vesting, other than
vesting upon death, Total Disability or Retirement, or such other circumstances, such as a
substantial reduction in force or a divestiture or sale of a business or unit, that the
Committee finds that a waiver of the applicable restrictions (or any portion thereof) would
be in the best interests of the Company, which is more rapid than pro rata annual vesting
over a three year period, and any Full Value Awards which vest upon the attainment of
performance objectives shall provide for a performance period of at least twelve months.
For purposes of this paragraph, a “Full Value Award” is an Award other than in the form of
an Option or Right, which is settled by the issuance of Stock. Notwithstanding the
foregoing, Awards of Restricted Units attributable to a Key Employee’s voluntary deferral of
an amount which would otherwise have been payable to the Key Employee in cash shall not be
subject to the restrictions set forth in this paragraph and shall not be counted against the
five percent limit referenced above.

 

 

 

Subject to the above limitations, shares of Stock to be issued under the Plan may
be made available from the authorized but unissued shares, or shares held by the
Company in treasury or from shares purchased in the open market.

For the purpose of computing the total number of shares of Stock available for Awards
under the Plan, there shall be counted against the foregoing limitations the number of
 shares of Stock subject to issuance upon exercise or settlement of Awards and the number of
 shares of Stock which equals the value of Performance Share Awards based upon their target
payout, in each case determined as at the dates on which such Awards are granted. If any
Awards under the Plan are forfeited, terminated, surrendered, exchanged, expire unexercised,
or are settled in cash in lieu of Stock (including to effect tax withholding) or for the net
issuance of a lesser number of shares than the number subject to the Award, the shares of
Stock which were theretofore subject to such Awards shall again be available for Awards
under the Plan to the extent of such forfeiture, termination, expiration, or cash or net
settlement of such Awards. If any award under the prior The Hartford Incentive Stock Plan
(as approved by the Company’s shareholders in 2000) or under the prior The Hartford 2005
Incentive Stock Plan (as approved by the Company’s shareholders in 2005) that was
outstanding as of March 31, 2010, is forfeited, terminated, surrendered, exchanged, expires
unexercised, or is settled in cash in lieu of Stock (including to effect tax withholding) or
for the net issuance of a lesser number of shares than the number subject to the award, the
 shares of Stock subject to such award (or the relevant portion thereof) shall be available
for Awards under the Plan and such shares shall be added to the Maximum Limit to the extent
of such forfeiture, termination, expiration, or cash or net settlement of such awards.

The Committee may grant other types of equity-based or equity-related awards
(“Stock-Based Awards”) not otherwise described by the terms of this Plan (including the
grant or offer for sale of unrestricted shares of Stock) in such amounts (subject to the
Maximum Limit and other limitations provided for herein) and subject to such terms and
conditions as the Committee shall determine. Such Stock-Based Awards may be granted as an
inducement to enter the employ of The Hartford or in satisfaction of any obligation of The
Hartford to a Key Employee, whether pursuant to this Plan or otherwise, that would otherwise
have been payable in cash or in respect of any other obligation of The Hartford Such
Stock-Based Awards may entail the transfer of actual Stock, or payment in cash or otherwise
of amounts based on the value of Stock and may include, without limitation, awards designed
to comply with or take advantage of the applicable local laws of jurisdictions other than
the United States. The Committee shall specify the extent to which the award recipient
shall have the right to receive Stock-Based Awards following termination of employment with
The Hartford; such provisions need not be uniform among all Stock-Based Awards, and may
reflect distinctions based on the reasons for such termination. Except as the Committee
shall otherwise specify at or after grant, Stock-Based Awards may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws
of descent and distribution, and during the award recipient’s lifetime only by the
recipient.

 

 

 

4. Grant of Awards and Award Documents

(a) Subject to the provisions of the Plan, the Committee shall: (i) determine and
designate from time to time those Key Employees and Directors or groups of Key Employees and
Directors to whom Awards are to be granted, (ii) determine the form or forms of Award to be
granted to any Key Employee and any Director; (iii) determine the amount or number of shares
of Stock subject to each Award; and (iv) determine the terms and conditions of each Award.
The Committee may in its discretion also make awards to Third Party Service Providers on
substantially the same terms and conditions as Awards are made to Key Employees, subject to
such modifications as are necessary to reflect the different nature of the services
provided.

(b) Each Award granted under the Plan shall be evidenced by an Award Document. Such
Award Document shall be subject to and incorporate the express terms and conditions of each
Award, if any, required under the Plan or required by the Committee.

5. Options and Rights

(a) With respect to Options and Rights, the Committee shall: (i) authorize the
granting of Incentive Stock Options, non-qualified stock options, or a combination of
Incentive Stock Options and non-qualified stock options; (ii) authorize the granting of
Rights which may or may not be granted in connection with all or part of any Option granted
under this Plan; (iii) determine the number of shares of Stock subject to each Option or the
number of shares of Stock that shall be used to determine the value of a Right; and (iv)
determine the time or times when and the manner in which each Option or Right shall be
exercisable and the duration of the exercise period.

(b) Any option issued hereunder which is intended to qualify as an Incentive Stock
Option shall be subject to such limitations or requirements as may be necessary for the
purposes of Section 422 of the Code or any regulations and rulings thereunder to the extent
and in such form as determined by the Committee in its discretion.

(c) The exercise period for an Option and a Right shall not exceed ten years from the
date of grant.

(d) The Option price per share shall be determined by the Committee at the time any
Option is granted and shall be not less than the Fair Market Value of one share of Stock on
the date the Option is granted. The grant price related to each Right shall be determined
by the Committee at the time any Right is granted; however, such grant price shall not be
less than the Fair Market Value of one share of Stock on the date the Right is granted.

(e) No part of any Option or Right may be exercised until the Key Employee who has been
granted the Award shall have remained in the employ of a Participating Company for such
period after the date of grant as the Committee may specify, if any,
and the Committee may further require exercisability in installments.

 

 

 

(f) Except as provided in Section 9, the purchase price of the shares of Stock as to
which an Option is exercised shall be paid to the Company at the time of exercise either in
cash, Stock already owned by the optionee, or a combination of the foregoing having a total
Fair Market Value equal to the purchase price. The Committee shall determine acceptable
methods for tendering Stock as payment upon exercise of an Option and may impose such
limitations and prohibitions on the use of Stock for such purpose as it deems appropriate.

(g) Unless otherwise set forth in the Award Document, in case of a Key Employee’s
termination of employment with all Participating Companies, the following provisions shall
apply:

(i) If a Key Employee who has been granted an Option or Right shall die before such
Option or Right has expired, his or her Option or Right may be exercised in full by: (A)
the person or persons to whom the Key Employee’s rights under the Option or Right pass upon
his or her death pursuant to the terms of the Plan, or if no such person has such right, by
his or her executors or administrators; (B) his or her Transferee(s) (with respect to
non-qualified Options or Rights); or (C) his or her Beneficiary designated pursuant to the
Plan, at any time, or from time to time, within five years after the date of the Key
Employee’s death or within such other period, and subject to such terms and conditions as
the Committee may specify, but not later than the expiration date specified in Section 5(c)
above. Any such Options or Rights not fully exercisable immediately prior to such optionee’s
death shall become fully exercisable upon such death unless the Committee, in its sole
discretion, shall otherwise determine.

(ii) If the Key Employee’s employment with all Participating Companies terminates (A)
because of his or her Total Disability, or (B) because of his or her voluntary termination
of employment due to Retirement, he or she may exercise his or her Options or Rights in full
at any time, or from time to time, within five years after the date of the termination of
his or her employment, or within such other period, and subject to such terms and conditions
as the Committee may specify, but not later than the expiration date specified in Section
5(c) above. Any such Options or Rights not fully exercisable immediately prior to such
optionee’s Total Disability or Retirement shall become fully exercisable upon such Total
Disability or Retirement unless the Committee, in its sole discretion, shall otherwise
determine at the time of grant.

(iii) If the Key Employee shall be terminated for cause as determined by the Committee,
all of such Key Employee’s Options or Rights outstanding at the date of such termination
(whether or not then exercisable) shall be canceled without further action by the Key
Employee, the Committee or the Company coincident with the effective date of such
termination.

 

 

 

(iv) Except as provided in Section 5(g)(ii) and Section 9, if a Key Employee’s
employment terminates for any other reason (including a voluntary resignation), he or she
may exercise his or her Options or Rights, to the extent that he or
she shall have been entitled to do so at the date of the termination of his or her
employment, at any time, or from time to time, within four months after the date of the
termination of his or her employment, or within such other period, and subject to such terms
and conditions, as the Committee may specify, but not later than the expiration date
specified in Section 5(c) above. All Options and Rights held by such Key Employee or any of
his or her assigns that are not eligible to be exercised upon the date of such termination
shall be canceled without further action by the Key Employee, the Committee or the Company
coincident with the effective date of such termination.

(v) Any Options or Rights not exercised within the period established in accordance
with this Section 5(g) shall be subject to Section 5(l) herein.

(h) Except as provided in this Section 5(h) or required by applicable law, no Option or
Right granted under the Plan shall be transferable other than upon the death of the
recipient of such Option or Right. During the lifetime of the optionee, an Option or Right
shall be exercisable only by the Key Employee or Director to whom the Option or Right is
granted. Notwithstanding the foregoing, all or a portion of a non-qualified Option or Right
may be transferred and assigned by such persons designated by the Committee, to such persons
or groups of persons designated as permissible Transferees by the Committee, and upon such
terms and conditions as the Committee may from time to time authorize and determine in its
sole discretion. Notwithstanding the preceding sentence, no Award under the Plan may be
transferred for value (as defined in the General Instructions to Form S-8 with respect to
the registration, pursuant to the Securities Act of 1933, of employee benefit plan
securities and/or interests).

(i) Except as provided in Section 9, if a Director’s service on the Board terminates
for any reason, including without limitation, termination due to death, disability or
retirement, such Director (or Beneficiary, in the event of death) may exercise any Option or
Right granted to him or her only to the extent determined by the Committee as set forth in
such Director’s Award Document and/or any administrative rules or other terms and conditions
adopted by the Committee from time to time applicable to such Option or Right granted to
such Director.

(j) With respect to an Incentive Stock Option, the Committee shall specify such terms
and provisions as the Committee may determine to be necessary or desirable in order to
qualify such Option as an “incentive stock option” within the meaning of Section 422 of the
Code.

 

 

 

(k) With respect to the exercisability and settlement of Rights:

(i) Except as expressly provided below, upon exercise of a Right, a Key Employee or
Director shall be entitled, subject to such terms and conditions as the Committee may
specify, to receive all or a portion of the excess of (A) the Fair Market Value of a
specified number of shares of Stock at the time of exercise, as determined by the Committee,
over (B) a specified amount which shall not, subject to Section 5(d), be less than the Fair
Market Value of such specified number of shares of Stock at the time
the Right is granted. Payment of any such excess shall be made as the Committee shall
specify in cash, the issuance or transfer to the Key Employee or Director of whole shares of
Stock with a Fair Market Value at such time equal to any excess, or a combination of cash
and shares of Stock with a combined Fair Market Value at such time equal to any such excess,
all as determined by the Committee. The Company will not issue a fractional share of Stock
and, if a fractional share would otherwise be issuable, the Company shall pay cash equal to
the Fair Market Value of the fractional share of Stock at such time.

(ii) Notwithstanding Section 5(k)(i), the Committee may specify at grant that payment
of any excess referenced in the first sentence of Section 5(k)(i) shall not be paid until a
specified date or, if earlier, upon the termination of the Key Employee’s employment, the
cessation of the Director’s service on the Board or, subject to Section 9(c)(vi), a Change
of Control. To the extent permissible without adverse tax consequences for the Key Employee
or Director, the Committee may permit the Key Employee or Director to elect when such
payment is made. Amounts, if any, deferred pursuant to this Section 5(k)(ii) shall be
subject to such terms and conditions as the Committee shall determine, including the manner
in which any deemed earnings on such deferred amounts shall be determined.

(iii) In the event of the exercise of such Right, the Company’s obligation in respect
of any related Option or such portion thereof will be discharged by payment of the Right so
exercised.

(l) Each outstanding Option and Right shall be deemed to be exercised, in the manner
set forth below, at the close of business on the scheduled expiration date of such Option or
Right if at such time the Option or Right by its terms remains exercisable and, if so
exercised, would result in a distribution to the holder of such Option or Right of at least
one share of Stock of the Company net of any applicable tax withholding requirements (a
“Deemed Exercise”). Such Deemed Exercise may be effected without notification by the
Director or Key Employee to the Company or by the Company to the Key Employee or Director.
Upon such Deemed Exercise, the Company shall issue and deliver to the Director or Key
Employee the greatest number of whole shares of Stock equal to the quotient of (i) divided
by (ii), with the quotient reduced as necessary to satisfy any applicable tax withholding
requirements, where (i) and (ii) are:

(i) The product of (x) the number of shares of Stock as to which the Option or Right is
being deemed exercised and (y) the excess of the Fair Market Value on the Deemed Exercise
date over the exercise price per share of such Option or the specified amount for such
Right, and

(ii) The Fair Market Value on such date.

with any remainder being payable in cash to the Participant. If, on the scheduled
expiration date of any Option or Right, the exercise of such Option or Right would not
result in a Deemed Exercise, then such Option or Right shall be canceled without further
action by the Key Employee or Director, the Committee or the Company on the date
following the last date on which such Option or Right may have been exercised in accordance
with this Section 5.

 

 

 

6. Performance Shares

(a) Subject to the provisions of the Plan, the Committee shall: (i) determine and
designate from time to time those Key Employees and Directors or groups of Key Employees and
Directors to whom Awards of Performance Shares are to be made, (ii) determine the
performance period (the “Performance Period”) and performance objectives (the “Performance
Objectives”) applicable to such Awards, (iii) determine whether to impose a Restriction
Period following the completion of the Performance Period applicable to any Key Employees
and Directors or groups of Key Employees and Directors, (iv) determine the form of
settlement of a Performance Share, and (v) generally determine the terms and conditions of
each such Award. At any date, each Performance Share shall have a value equal to the Fair
Market Value of a share of Stock at such date; provided that the Committee may limit the
aggregate amount payable upon the settlement of any Award.

(b) The Committee shall determine a Performance Period of not less than one nor more
than five years. Performance Periods may overlap and Key Employees or Directors may
participate simultaneously with respect to Performance Shares for which different
Performance Periods are prescribed.

(c) The Committee may impose a Restriction Period of any duration with respect to any
 shares of stock issued in payment of a Performance Share Award, which shall apply
immediately following the completion of the Performance Period to which it relates.

(d) The Committee shall determine the Performance Objectives of Awards of Performance
Shares. Performance Objectives may vary from Key Employee to Key Employee, Director to
Director and between groups of Key Employees and Directors, and shall be based upon one or
more of the following objective criteria, as the Committee deems appropriate: (A) earnings
per share, (B) return on equity, (C) cash flow, (D) return on total capital, (E) return on
assets, (F) economic value added, (G) increase in surplus, (H) reductions in operating
expenses, (I) increases in operating margins, (J) earnings before income taxes and
depreciation, (K) total shareholder return, (L) return on invested capital, (M) cost
reductions and savings, (N) earnings before interest, taxes, depreciation and amortization
(“EBITDA”), (O) pre-tax operating income, (P) net income, (Q) after-tax operating income,
(R) book value or book value per share, (S) core earnings or core earnings per share and/or
(T) productivity improvements. The objective criteria shall be (i) determined solely by
reference to any one or more of the above performance factors of the Company (or the
performance factors of any subsidiary or affiliate of the Company or any division or unit
thereof), or (ii) based on any one or more of the above 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
(iii) based on a Key Employee’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: growth and
profitability, customer satisfaction, leadership effectiveness, business development,
negotiating transactions and sales or developing long term business goals. If during the
course of a Performance Period there shall occur significant events which the Committee
expects to have a substantial effect on the applicable Performance Objectives during such
period, the Committee may revise such Performance Objectives.

(e) At the beginning of a Performance Period, the Committee shall determine for each
Key Employee or group of Key Employees the number of Performance Shares or the percentage of
Performance Shares which shall be paid to the Key Employee or member of the group of Key
Employees following completion of the Performance Period or if later, following any
applicable Restriction Period, if the applicable Performance Objectives are met in whole or
in part.

(f) If a Key Employee terminates service with all Participating Companies during a
Performance Period or any applicable Restriction Period: (i) because of death, (ii)
because of Total Disability, (iii) because of his or her voluntary termination of employment
due to Retirement, or (iv) under other circumstances where the Committee in its sole
discretion finds that a waiver would be in the best interests of the Company; that Key
Employee may, as determined by the Committee, be entitled to payment in settlement of such
Performance Shares at the end of the Performance Period or if later, at the end of any
applicable Restriction Period, based upon the extent to which the Performance Objectives
were satisfied at the end of such Performance Period and prorated for the portion of the
Performance Period together with any applicable Restriction Period during which the Key
Employee was actively employed by any Participating Company. If a Key Employee terminates
service with all Participating Companies during a Performance Period or any applicable
Restriction Period for any other reason, then such Key Employee shall not be entitled to any
Award with respect to that Performance Period and shall forfeit any shares of Stock subject
to a Restriction Period unless the Committee shall otherwise determine.

(g) Except as provided in Section 9, if a Director’s service on the Board terminates
for any reason, including, without limitation, termination due to death, disability or
retirement, prior to the lapse of any applicable Restriction Period, such Director (or
Beneficiary, in the event of death) shall be or become vested in, or entitled to payment in
respect of, such Award to the extent determined by the Committee as set forth in such
Director’s Award Document and/or any administrative rules or other terms and conditions
adopted by the Committee from time to time applicable to such Award granted to such
Director; provided that, to the extent that any such rules or terms and conditions establish
a payment term not associated directly with the vesting of any such Award, only the payment
terms established under such rules or terms and conditions as are in effect at the date the
Award is granted to the Director shall apply to such Award.

 

 

 

(h) Each Award of a Performance Share shall be paid in whole shares of
Stock, or cash, or a combination of Stock and cash either as a lump sum payment or, if
the Committee shall so determine at the time of grant, in annual installments, with payment
to commence as soon as practicable (but in any event within 90 days) after the end of the
relevant Performance Period or if later, at the end of any applicable Restriction Period.

(i) Except as otherwise required by applicable law, no Performance Share granted under
the Plan shall be transferable other than on account of death in accordance with the terms
of the Plan.

(j) Notwithstanding anything else contained in the Plan to the contrary, unless the
Committee otherwise determines at the time of grant, any Award of Performance Shares, to an
officer of the Company or a Subsidiary who is subject to the reporting requirements of
Section 16(a) of the Act, shall become vested, if at all, upon the determination by the
Committee that Performance Objectives established by the Committee have been attained, in
whole or in part, to the extent required to ensure that such Award is deductible by the
Company or such Subsidiary pursuant to Section 162(m) of the Code. To the extent such Award
is so intended to qualify as performance-based compensation under Section 162(m),
notwithstanding anything else in the Plan to the contrary, the Committee shall not have any
discretionary power or authority to increase the amount payable with respect to such Award
after it has been granted, and shall be deemed not to have and may not exercise with respect
to such Award any authority or discretion afforded to it under the Plan that would cause the
Award to fail to so qualify.

7. Restricted Stock and Restricted Units

(a) Except as provided in Section 9, Restricted Stock and Restricted Units shall be
subject to a Restriction Period specified by the Committee. The Committee may provide for
the lapse of a Restriction Period in installments where deemed appropriate, and it may also
require the achievement of predetermined performance objectives in order for such
Restriction Period to lapse. Except as otherwise provided in the Plan or as specified by
the Committee, certificates for shares related to an Award of Restricted Stock or Restricted
Units shall be delivered to a Key Employee or Director as soon as administratively
practicable (but in no event later than 90 days) following the end of the applicable
Restriction Period.

(b) Except when the Committee determines otherwise pursuant to Section 7(d), if a Key
Employee terminates employment with all Participating Companies for any reason before the
expiration of the Restriction Period, all shares of Restricted Stock and all rights with
respect to any Award of Restricted Units still subject to restriction shall be forfeited by
the Key Employee and shall be reacquired by the Company.

(c) Except as otherwise provided in this Section 7 or required by applicable law, no
 shares of Restricted Stock received by a Key Employee or Director and no rights conveyed by
an Award of Restricted Units shall be sold, exchanged, transferred, pledged,
hypothecated or otherwise disposed of during the Restriction Period.

 

 

 

(d) In the event that a Key Employee’s employment terminates due to (i) death, (ii)
Total Disability, (iii) a voluntary termination of employment due to Retirement, or (iv)
such other circumstances, such as a substantial reduction in force or a divestiture or sale
of a business or unit, that the Committee finds that a waiver of the applicable restrictions
(or any portion thereof) would be in the best interests of the Company, such Key Employee
(or Beneficiary, in the event of death) shall be or become vested in, or entitled to payment
in respect of, Restricted Stock or Restricted Units then held by such Key Employee to the
extent determined by the Committee and set forth in such Key Employee’s Award Documents
and/or any administrative rules or other terms and conditions adopted by the Committee from
time to time applicable to such Restricted Stock or Restricted Units granted to such Key
Employee; provided that, while the Committee may waive or modify the vesting conditions, the
payment terms in effect under such Award Documents, rules or terms and conditions at the
date the Award is granted to the Key Employee shall not be modified. With respect to any
Award of Restricted Units, unless otherwise expressly provided herein or otherwise
determined by the Committee (and specified in writing) at the time of grant, any amount
payable to the Key Employee or his or her Beneficiary in accordance with this Section 7(d)
shall be paid within 90 days following the end of the applicable Restriction Period
determined without regard to this paragraph.

(e) Except as provided in Section 9, if a Director’s service on the Board terminates
for any reason, including without limitation termination due to death, disability or
retirement, prior to the lapse of any applicable Restriction Period, such Director (or
Beneficiary, in the event of death) shall be or become vested in, or entitled to payment in
respect of, such Award to the extent determined by the Committee as set forth in such
Director’s Award Document and/or any administrative rules or other terms and conditions
adopted by the Committee from time to time applicable to such Award granted to such
Director; provided that, to the extent that any such rules or terms and conditions establish
a payment term not associated directly with the vesting of any such Award, only the payment
terms established under such rules or terms and conditions as are in effect at the date the
Award is granted to the Director shall apply to such Award.

(f) The Committee may require, on such terms and conditions as it deems appropriate or
desirable, that the certificates for Stock delivered under the Plan in respect of any grant
of Restricted Stock may be held in custody by a bank or other institution, or that the
Company may itself hold such shares in custody until the Restriction Period expires or until
restrictions thereon otherwise lapse, or later as provided in Section 14 hereof. The
Committee may require, as a condition of any Award of Restricted Stock that the Key Employee
or Director shall have delivered a stock power endorsed in blank relating to the Restricted
Stock. Notwithstanding any provision of the Plan to the contrary, Restricted Stock may be
evidenced on a book entry or electronic basis or pursuant to other arrangements (including,
without limitation, in an omnibus or nominee account administered by a third party) until
restrictions thereon otherwise lapse, in lieu of issuing physical certificates to the Key
Employee or Director.

 

 

 

(g) At the discretion of the Committee, the Restricted Unit account of a Key Employee
or Director may be credited with Dividend Equivalents during the Restricted Period which
shall be subject to the same terms and conditions (and become payable and be paid) as the
Restricted Units to which they relate. Unless the Committee shall otherwise determine at or
after grant, all Dividend Equivalents payable in respect of Restricted Units shall be deemed
reinvested in that number of Restricted Units determined based on the Fair Market Value on
the date the corresponding dividend on the Stock is payable to stockholders.

(h) Nothing in this Section 7 shall preclude a Key Employee or Director from exchanging
any shares of Restricted Stock subject to the restrictions contained herein for any other
 shares of Stock that are similarly restricted.

(i) Subject to Section 7(f) and Section 8, a stock certificate shall be issued in the
name of each Key Employee or Director awarded Restricted Stock under the Plan. Such
certificate shall be registered in the name of the Key Employee or Director, and shall bear
an appropriate legend reciting the terms, conditions and restrictions, if any, applicable to
such Award and shall be subject to appropriate stop-transfer orders. Upon the lapse of the
Restricted Period with respect to Restricted Stock, such shares shall no longer be subject
to the restrictions imposed under this Section 7 and the Company shall issue or have issued
new share certificates, or otherwise render available the shares represented by the
certificate, without the legend referred to herein in exchange for those certificates
previously issued. Upon the lapse of the Restricted Period with respect to any Restricted
Units, the Company shall deliver (or otherwise render available) to the Key Employee or
Director (or, if applicable, his or her beneficiary or permitted assigns, one share of Stock
for each Restricted Unit as to which restrictions have lapsed (including any such Restricted
Units related to any Dividend Equivalents credited with respect to such Restricted Units).
The Committee may, in its sole discretion, elect to pay cash or part cash and part Stock in
lieu of delivering only Stock for Restricted Units. If a cash payment is made in lieu of
delivering Stock, the amount of such cash payment for each share of Stock to which a Key
Employee or Director is entitled shall be equal to the Fair Market Value on the date on
which the Restricted Period lapsed with respect to the related Restricted Unit.
Notwithstanding the foregoing, the Committee may, to the extent possible without adverse tax
consequences to the Key Employee or Director, require or permit the deferral of payment in
respect of Restricted Units to a date or dates (including, without limitation, the date the
Key Employee’s employment or a Director’s services on the Board terminates) subsequent to
the date that the Restriction Period lapses on such terms and conditions (including, without
limitation, the manner in which the amounts payable shall be deemed invested during the
period of deferral) as it shall determine from time to time.

(j) Except for the restrictions set forth herein and unless otherwise determined by the
Committee, a Key Employee or Director shall have all the rights of a shareholder with
respect to shares of Restricted Stock, including but not limited to, the right to vote and
the right to receive dividends. A Key Employee or Director shall not have any right,
in respect of Restricted Units awarded pursuant to the Plan, to vote on any matter submitted
to the Company’s stockholders until such time, if at all, as the shares of Stock
attributable to such Restricted Units have been issued.

 

 

 

(k) In addition, the Committee may permit Key Employees and Directors or any group of
Key Employees and Directors to elect to receive Restricted Units in exchange for or in lieu
of other compensation (including salaries, annual bonuses, annual retainer and meeting fees)
that would otherwise have been payable to such Key Employees and Directors in cash. The
Committee shall establish the terms and conditions of any such Restricted Units, including
the Restriction Period applicable thereto, and the date on which Stock shall be issued in
respect thereof. The Committee shall establish the terms and conditions applicable to any
election by a Key Employee or Director to receive Restricted Units (including the time at
which any such election shall be made).

(l) Notwithstanding anything else contained in the Plan to the contrary, the Committee
may determine at the time of grant that any Award of Restricted Stock or Restricted Units to
a Key Employee or Director shall become vested, if at all, only upon the determination by
the Committee that Performance Objectives established by the Committee have been attained,
in whole or in part. In such case, the Performance Objectives determined by the Committee
may vary from Key Employee to Key Employee, Director to Director and between groups of Key
Employees and Directors, and shall be established by the Committee and determined by
applying the standards (and selecting from the criteria) applicable to Performance Shares
under Section 6(d). If there shall occur significant events which the Committee expects to
have a substantial effect on the applicable Performance Objectives, the Committee may revise
such Performance Objectives. Unless the Committee otherwise determines at the time of
grant, any Award of Restricted Stock or Restricted Units that is subject to
performance-based vesting in accordance with this Section 7(l), to an officer of the Company
or a Subsidiary who is subject to the reporting requirements of Section 16(a) of the Act,
shall be subject to the same requirements and restrictions as apply to a Performance Share
Award under Section 6(j).

8. Issuance of Stock

(a) The Company shall not be required to issue or deliver any shares of Stock prior to:
(i) the listing of such shares on any stock exchange on which the Stock may then be listed,
(ii) the completion of any registration or qualification of such shares under any federal or
state law, or any ruling or regulation of any government body which the Company shall, in
its sole discretion, determine to be necessary or advisable, and (iii) the satisfaction of
any tax withholding obligations as provided in Section 14 hereof.

 

 

 

(b) All shares of Stock delivered under the Plan shall also be subject to such
stop-transfer orders and other restrictions as the Committee may deem advisable under the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Stock is then listed and any applicable
federal or state securities laws, and the Committee may cause a legend or legends to be
placed on any such certificates to make appropriate reference to such restrictions. In
making such determination, the Committee may rely upon an opinion of counsel for the
Company.

(c) Except to the extent such shares are subject to forfeiture during any applicable
Restriction Period, each Key Employee or Director who receives Stock in settlement of or as
part of an Award, shall have all of the rights of a shareholder with respect to such shares,
including the right to vote the shares and receive dividends and other distributions. No Key
Employee or Director awarded an Option, a Right, a Restricted Unit or a Performance Share
shall have any right as a shareholder with respect to any shares of Stock covered by his or
her Option, Right, Restricted Unit or Performance Share prior to the date of issuance to him
or her of such shares.

9. Change of Control

(a) For purposes of this Plan, a Change of Control shall occur if:

(i) 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, other than the Company or a
subsidiary of the Company or any employee benefit plan sponsored by the Company or a
subsidiary of the Company is the Beneficial Owner of forty percent or more of the
outstanding stock of the Company entitled to vote in the election of directors of the
Company;

(ii) any Person other than the Company or a subsidiary of the Company or any employee
benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares
pursuant to a tender offer or exchange offer to acquire any stock of the Company (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 of
twenty percent or more of the outstanding stock of the Company entitled to vote in the
election of directors of the Company (calculated as provided in paragraph (d) of Rule 13d-3
under the Act in the case of rights to acquire stock);

(iii) any merger, consolidation, recapitalization or reorganization of the Company
approved by the stockholders of the Company shall be consummated, other than any such
transaction immediately following which the persons who were the Beneficial Owners of the
outstanding securities of the Company entitled to vote in the election of directors of the
Company 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 Company entitled to vote in the election of
directors of the Company 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
Company, such surviving entity or any subsidiary of such surviving entity;

 

 

 

(iv) 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 Company approved by the
stockholders of the Company shall be consummated; or

(v) within any 24 month period, the persons who were directors of the Company
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 Company, 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
(A) 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 (v), and (B) was not designated by a Person who has
entered into an agreement with the Company to effect a transaction described in Section
9(a)(iii) or Section 9(a)(iv) of the Plan.

(b) For purposes of this Plan, a Potential Change of Control shall occur if:

(i) A Person shall commence a tender offer, which if successfully consummated, would
result in such Person being the Beneficial Owner of at least 20% of the stock of the Company
entitled to vote in the election of directors of the Company;

(ii) The Company enters into an agreement, the consummation of which would constitute a
Change of Control;

(iii) Solicitation of proxies for the election of directors of the Company by anyone
other than the Company, which, if such directors were elected, would result in the
occurrence of a Change of Control as described in Section 9(a)(v); or

(iv) 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.

(c) Notwithstanding any provision in this Plan to the contrary, upon the occurrence of
a Change of Control:

(i) Each Option and Right outstanding on the date such Change of Control occurs, and
which is not then fully vested and exercisable, shall immediately vest and become
exercisable to the full extent of the original grant for the remainder of its term.

(ii) The surviving or resulting corporation may, in its discretion, provide for the
assumption or replacement of each outstanding Option and Right granted under the Plan on
terms which are no less favorable to the optionee than those applicable to the Options and
Rights immediately prior to the Change of Control.

 

 

 

(iii) Except to the extent otherwise expressly provided in Section 9(c)(vi), the
restrictions applicable to shares of Restricted Stock or to Restricted Units held by Key
Employees pursuant to Section 7 shall lapse upon the occurrence of a Change of Control, and
such Key Employees shall receive immediately unrestricted certificates for all of such
 shares.

(iv) If a Change of Control occurs during the course of a Performance Period or any
Restriction Period applicable to an Award of Performance Shares pursuant to Section 6, then
a Key Employee shall be deemed to have satisfied the Performance Objectives at the target
level specified in the Key Employee’s Award agreement or, if greater, otherwise specified by
the Committee at or after grant, and to have completed any applicable Restriction Period
effective on the date of such occurrence. Except to the extent otherwise expressly
provided in Section 9(c)(vi), distribution of amounts payable in connection with an Award of
Performance Shares shall be made immediately following (but in no event later than 30 days)
following the occurrence of the Change of Control.

(v) Without limiting the foregoing provisions of this Section 9(c), in the event of a
Change of Control the Committee may, in its discretion, provide any of the following either
absolutely or subject to the election of such Key Employees:

a. Each Option and Right shall be surrendered or exercised for an immediate lump sum
cash amount equal to the excess of the Formula Price over the exercise price;

b. Each Restricted Stock, Restricted Unit and Award of Performance Shares shall be
exchanged for an immediate lump sum cash amount equal to the number of outstanding units or
 shares awarded to such Key Employee multiplied by the Formula Price.

(vi) Notwithstanding the foregoing provisions of this Section 9(c), unless the event
constituting a Change of Control for purposes of the Plan shall also constitute a “change in
control” as defined in the regulations promulgated under Section 409A of the Code, no
distribution or payment shall be made upon or in connection with the occurrence of a Change
of Control with respect to (x) any Restricted Units or Performance Shares or (y) any other
Award that the Committee shall determine, on or before the later of December 31, 2008 (or
such later date as shall be permitted under transitional relief provided under Section 409A
of the Code) and the date the Award is granted, does not qualify for any applicable
exemption from the application of Section 409A of the Code (such as by reason of being a
stock right or qualifying as a short-term deferral). To the extent that, pursuant to the
immediately preceding sentence, an Award
is not distributable or payable upon the occurrence of a Change of Control, distribution or
payment of such Award shall be made at the time otherwise specified under the Plan or the
Award Documents without regard to the occurrence of a Change of Control. Without limiting
the generality of the foregoing, nothing in this Section 9(c)(vi) shall be construed to
prevent any Key Employee’s rights in respect of any Award from becoming non-forfeitable upon
the occurrence of a Change of Control.

 

 

 

(d) 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 Plan, in the
case of an awardee whose employment or service 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, and the consummation occurs within 60
days of such date of termination, then the date of termination of such an awardee’s
employment or service shall be deemed for purposes of the Plan to be the day following the
date of the applicable consummation.

10. Beneficiary

(a) Each Key Employee, Director and/or his or her Transferee may file with the Company
a written designation of one or more persons as the Beneficiary who shall be entitled to
receive the Award, if any, payable under the Plan upon his or her death. A Key Employee,
Director or Transferee may from time to time revoke or change his or her Beneficiary
designation without the consent of any prior Beneficiary by filing a new designation with
the Company. The last such designation received by the Company shall be controlling;
provided, however, that no designation, or change or revocation thereof, shall be effective
unless received by the Company prior to the Key Employee’s, Director’s or Transferee’s
death, as the case may be, and in no event shall it be effective as of a date prior to such
receipt.

(b) If no such Beneficiary designation is in effect at the time of death of a Key
Employee, Director or Transferee, as the case may be, or if no designated Beneficiary
survives the Key Employee, Director or Transferee or if such designation conflicts with
applicable law, the estate of the Key Employee, Director or Transferee, as the case may be,
shall be entitled to receive the Award, if any, payable under the Plan upon his or her
death. If the Committee is in doubt as to the right of any person to receive such Award, the
Company may retain such Award, without liability for any interest thereon, until the
Committee determines the rights thereto, or the Company may pay such Award into any court of
appropriate jurisdiction and such payment shall be a complete discharge of the liability of
the Company therefore.

 

 

 

11. Administration of the Plan

(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. Except to the
extent otherwise expressly provided in the Plan, any action, authority or power reserved to
the Committee shall be within the Committee’s sole and absolute discretion.

(c) The Committee’s decisions and determinations under the Plan need not be uniform and
may be made selectively among Key Employees and Directors, whether or not such Key Employees
and Directors are similarly situated.

(d) The Committee may, in its sole discretion, delegate such of its powers as it deems
appropriate to the Company’s Executive Vice President, Human Resources (or other person
holding a similar position) or the Company’s 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.

 

 

 

12. Amendment, Extension or Termination

The Board or the Committee may, at any time, amend or modify the Plan and,
specifically, may make such modifications to the Plan as it deems necessary to avoid the
application of Section 162(m) of the Code and the Treasury regulations issued thereunder.
However: (i) no amendment shall, without approval by a majority of the Company’s
stockholders, (A) alter the group of persons eligible to participate in the Plan, or (B)
except as provided in Section 13 increase the maximum number of shares of Stock which are
available for Awards under the Plan; or, (ii) with respect to all Options and Rights, allow
the Committee to reprice the Options or Rights. The Board may suspend or terminate the Plan
at any time without the consent of any person. 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 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 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. Notwithstanding the preceding provisions, the
Board or the Committee may amend the Plan or an Award Document to take effect retroactively
or otherwise, as deemed necessary or advisable for the purpose of conforming the Plan or an
Award Document to any present or future law relating to plans of this or similar nature and
the administrative regulations and rulings promulgated thereunder (including, but not
limited to, amendments deemed necessary or advisable to avoid payments being subject to
additional tax under Code Section 409A).

13. Adjustments in Event of Change in Common Stock

In the event of any reorganization, merger, recapitalization, consolidation,
liquidation, special cash dividend, stock dividend, stock split, reclassification,
combination of shares, rights offering, split-up or extraordinary dividend (including a
spin-off) or divestiture, or any other change in the corporate structure or shares, the
Committee shall make such adjustment in the Stock subject to Awards, including Stock subject
to purchase by an Option or issuable in respect of Restricted Units, or the terms,
conditions or restrictions on Stock or Awards, including the price payable upon the exercise
of such Option and the number of shares subject to Restricted Stock or Restricted Unit
Awards, as shall be necessary to preserve Key Employee rights substantially proportionate to
those rights existing immediately prior to such transaction or event.

 

 

 

14. Miscellaneous

(a) If a Change of Control has not occurred and if the Committee determines that a Key
Employee has taken action inimical to the best interests of any Participating Company, the
Committee may, in its sole discretion, terminate in whole or in part such portion of any
Option or Right as has not yet become exercisable at the time of termination, terminate any
Performance Share Award for which the Performance Period or any applicable Restriction
Period has not been completed or terminate any Award of Restricted Stock or Restricted Units
for which the Restriction Period has not lapsed.

(b) Except as provided in Section 9, nothing in this Plan or any Award granted
hereunder shall confer upon any employee any right to continue in the employ of any
Participating Company or interfere in any way with the right of any Participating Company to
terminate his or her employment at any time. No Award payable under the Plan shall be deemed
salary or compensation for the purpose of computing benefits under any employee benefit plan
or other arrangement of any Participating Company for the benefit of its employees unless
the Company shall determine otherwise. No Key Employee shall have any claim to an Award
until it is actually granted under the Plan. To the extent that any person acquires a right
to receive payments from the Company under this Plan, such right shall be no greater than
the right of an unsecured general creditor of the Company. All payments to be made hereunder
shall be paid from the general funds of the Company and no special or separate fund shall be
established and no segregation of assets shall be made to assure payment of such amounts
except as provided in Section 7(e) with respect to Restricted Stock.

(c) 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 Award under the Plan, including but not limited to at any time: (i)
requiring a Key Employee to submit payment to the Company for such taxes before making
settlement of any Award of Stock or other amount due under the Plan, (ii) withholding such
taxes from wages or other amounts due to the Key Employee before making settlement of any
Award of Stock or other amount due under the Plan, (iii) making settlement of any Award of
Stock or other amount due under the Plan to a Key Employee part in Stock and part in cash to
facilitate satisfaction of such withholding obligations, or (iv) receiving Stock already
owned by, or withholding 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 14(c) 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.

 

 

 

(d) The Committee may permit deferrals of compensation pursuant to the Plan
or any subplan hereof which meet the requirements of Code Section 409A and the
regulations thereunder. Additionally, to the extent any Award is subject to Code Section
409A, notwithstanding any provision herein to the contrary, the Plan does not permit the
acceleration of the time or schedule of any distribution related to such Award, except as
permitted by Code Section 409A and the regulations and rulings promulgated thereunder.

(e) The Plan and the grant of Awards shall be subject to all applicable federal and
state laws, rules, and regulations and to such approvals by any government or regulatory
agency as may be required. The Plan and each Award Document shall be governed by the laws
of the State of Delaware, excluding any conflicts or choice of law rule or principle that
might otherwise refer construction or interpretation of the Plan to the substantive law of
another jurisdiction. Unless otherwise provided in the Award Document, recipients of an
Award under the Plan are deemed to submit to the exclusive jurisdiction and venue of the
federal or state courts of Connecticut to resolve any and all issues that may arise out of
or relate to the Plan or any related Award Document. Notwithstanding any other provision
hereof, the Plan shall, during the period that the United States Department of the Treasury
holds any debt or equity securities of the Company, comply with the provisions of Section
111 of the Emergency Economic Stabilization Act of 2008, as amended, and any guidance or
regulations thereunder. The Company shall have the right at any time to recoup any amount
paid or payable hereunder to the fullest extent that, in the view of management, such
recoupment either (i) is required by applicable law or listing standards, or (ii) is
determined by the Company to be necessary in accordance with Company policy or business
circumstances or appropriate in light of a Key Employee’s action, or failure to act, which
is inimical to the best interests of any Participating Company.

(f) The terms of the Plan shall be binding upon the Company and its successors and
assigns.

(g) Captions preceding the sections hereof are inserted solely as a matter of
convenience and in no way define or limit the scope or intent of any provision hereof.

15. Effective Date, Term of Plan and Shareholder Approval

The effective date of the Plan shall be May 19, 2010. No Award shall be granted under
this Plan after the Plan’s termination date. The Plan’s termination date shall be the
earlier of: (a) May 19, 2020, or (b) the date on which the Maximum Limit (as defined in
Section 3 of the Plan) is reached; provided, however, that the Plan will continue in effect
for existing Awards as long as any such Award is outstanding.

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