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THE HARTFORD
EXECUTIVE SEVERANCE PAY PLAN I
This document describes your benefits under The Hartford Executive Severance
Pay Plan I and includes the text of the Plan and other important information.
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[GRAPHIC OMITTED]
JUNE 27, 2000
THE HARTFORD
EXECUTIVE SEVERANCE PAY PLAN I
1. PURPOSE. The purpose of The Hartford Executive Severance Pay Plan I (the
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"PLAN") is to assist in occupational transition by providing severance pay for
Tier 3 executives covered by this Plan (and such other individuals as may be
specifically designated by the Plan Administrator) whose employment is
terminated under conditions set forth in this Plan.
2. APPLICATION OF PLAN. This amended and restated Plan is effective June 27,
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2000. Any termination of employment that has an Effective Date (as defined
herein) while this Plan is in effect shall be governed exclusively by the terms
of this Plan and by no other plan, policy, practice or arrangement, except (A)
where this Plan is expressly superseded by an individual written employment
contract or other written agreement with the Company (as defined herein), or (B)
where the Plan Administrator determines that the Plan in effect prior to this
Plan shall apply to an executive involved in the performance discipline process
on or before June 27, 2000. To the extent that this Plan is expressly superseded
by any such contract or agreement, no severance shall be payable hereunder, and
the provisions of this Plan will be deemed null and void and without effect.
3. COVERED EMPLOYEES. You are a Covered Employee under this Plan if you are an
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"EMPLOYEE" (as defined below) who: (A) qualifies as an "ELIGIBLE EMPLOYEE" (as
defined below), and (B) is identified as a Tier Three executive of the Company
on the date selected by the Company (or Plan Administrator or designee) as your
last day of active employment (the "EFFECTIVE DATE").
An Employee on an authorized leave of absence, paid or unpaid (including medical
leave of absence) of not more than twenty-six (26) weeks 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. An Employee on a leave
of absence due to Disability (as defined in The Hartford Investment and Savings
Plan) of more than six months will be considered a Covered Employee for purposes
of this Plan if he or she seeks employment with the Company immediately
following the period of Disability.
The "COMPANY" means, collectively, Hartford Fire Insurance Company and Hartford
Life and Accident Insurance Company, and any of their designated subsidiaries or
affiliates, and any successor of any of the foregoing by merger or purchase or
otherwise.
"EMPLOYEE" means any person regularly employed by 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.
"ELIGIBLE EMPLOYEE" means an Employee employed by the Company; provided,
however, that except as the Plan Administrator may otherwise provide on a basis
uniformly applicable to all persons similarly situated, Eligible Employee shall
not include any "INELIGIBLE PERSON," which means all of the following: (A) a
person who: (i) is paid on an hourly basis, and (ii) does not actively work for
the Company at least 20 hours per week on a scheduled basis; or (B) a person
who: (i) is paid on a salaried basis, and (ii) does not actively work for the
Company at least 30 hours per week on a scheduled basis; or (C) a person who:
(i) holds a position with the Company's "HARTEMP" Program, or (ii) is hired to
work for the
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Company through a temporary employment agency, or (iii) is hired to a position
with the Company with notice on his or her date of hire that the position will
terminate on a certain date; or (D) a person who is a leased employee (within
the meaning of Section 414(n)(2) of the Internal Revenue Code of 1986, as
amended) of the Company or is otherwise employed 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 the
Company, or (E) a person who performs services for the Company as an independent
contractor or under any other non-employee classification, or is classified by
the Company as, or determined by the Company to be, an independent contractor,
or who is classified by the Company as, or determined by the 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
the 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 is
otherwise 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 Plan
Administrator, and if so designated, the participation of such person in the
Plan shall be prospective only.
4. SEVERANCE PAY UPON TERMINATION OF EMPLOYMENT. If the Company terminates your
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employment, you shall be provided severance pay in accordance with the terms of
this Plan EXCEPT if you:
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o are terminated for misconduct or other disciplinary action, which by
way of example may include, but is not limited to, the following:
excessive absenteeism/tardiness; serious violations of Company work
rules or policies, including but not limited to falsification of
records, security violations, or violations of anti-harassment
policies; violation of the Company Code of Corporate Conduct or other
similar policy or undertaking of the Company; or any Company-initiated
termination for cause or for actions that are immoral, unethical,
insubordinate, inimical to the best interests of the Company, or
illegal;
o are terminated for poor performance, except as provided in Section
5(B);
o refuse or accept a Comparable Position offered as alternative
employment with the Company. For purposes of this Plan, "COMPARABLE
POSITION" shall mean a position which carries with it the same base
salary and the same range of total incentive compensation opportunity
offered by the previous position held, and with the same or similar
duties or with different duties which, in the judgment of the Plan
Administrator or designee, the employee is able to perform, and which
is located within a 50-mile radius of the previous position's location;
provided that changes in employee benefits shall not be interpreted to
constitute a non-Comparable Position if the position offered otherwise
constitutes a Comparable Position;
o terminate employment with the Company prior to the Effective Date (as
defined in Section 3);
o are terminated while on a non-disability or non-military leave of
absence (paid or unpaid) after 26 weeks of such leave;
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o are mandatorily retired on or after your Normal Retirement Date where
legally permitted. "NORMAL RETIREMENT DATE" shall mean the first day of
the month which coincides with or follows your 65th birthday;
o accept or refuse a Comparable Position or are terminated following
acceptance of a Comparable Position under circumstances described in
Section 10 hereof; or
o are eligible for greater severance payments under the terms of an
individual written employment contract or other written agreement with
the Company.
If you initiate termination of employment for any reason including resigning,
retiring or failing to return to work immediately following the expiration of
any non-disability or non-military leave of absence, or if you fail to seek
employment with the Company immediately following a leave of absence due to
Disability of more than six months, or if you die, no severance pay will be
provided under this Plan.
5. SCHEDULE OF SEVERANCE PAY.
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(A) SEVERANCE PAY FOR TERMINATIONS OTHER THAN WORK PERFORMANCE-BASED
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TERMINATIONS
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If you are a Covered Employee and your employment is terminated by the
Company (i) FOR REASONS OTHER THAN THOSE LISTED IN SECTION 4, and (ii)
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IN A SITUATION OTHER THAN ONE DESCRIBED IN SECTION 5(B) BELOW, you
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shall be provided with severance pay, up to a maximum of 52 weeks,
according to the following Schedule of Severance Pay, which sets forth
the number of weeks of Weekly Base Pay (as defined below) that will be
provided to you based on your Years of Service (as defined below) as of
the Effective Date, subject to the provisions of Section 7 of this
Plan. Such severance pay shall be paid at the time and in the form
described in Section 7 of this Plan.
YEARS OF SERVICE NUMBER OF WEEKS OF WEEKLY BASE PAY
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- Less than 2 - 19 weeks, plus 2 weeks
- 2 or more - 19 weeks, plus 1 week for each Year of Service
Except as provided below, "WEEKLY BASE PAY" shall mean your annual base
salary at the Effective Date, excluding variable pay such as bonuses,
incentive awards, performance share awards and other premiums and
allowances, divided by fifty-two (52) weeks.
If on the Effective Date you are covered under a sales incentive plan
approved by the Plan Administrator, "WEEKLY BASE PAY" shall mean your
Weekly Base Pay as defined above, plus the average weekly incentive pay
you received during the preceding 24 calendar months (or such lesser
number of months you were covered under such a plan), not to exceed the
maximum of the assigned salary range.
"YEARS OF SERVICE" shall mean the total number of your completed full
years of employment measured from your Company Service Date to your
Effective Date. A "YEAR OF SERVICE" shall mean one completed full year
of employment with the Company. Your "COMPANY SERVICE
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DATE" is the date used to determine your eligibility for vesting under
the applicable Company retirement plan in effect on the Effective Date
(or if no such plan is in effect, such other date as may be designated
as your Company Service Date in the sole discretion of the Plan
Administrator or designee).
(B) SEVERANCE PAY FOR WORK PERFORMANCE-BASED TERMINATIONS
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Full severance will be paid, according to the Schedule of Severance Pay
set forth in Section 5(A) of this Plan, for situations where you are
terminated by the Company for performance reasons only if you have been
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in your current position for no more than six months and the position
you held immediately prior to your current position was eliminated.
For situations other than the above, you may elect one of two options
if you have been given a written probation notice because of poor work
performance. Such probation notice may be a written warning, an action
plan, a performance action plan, a final warning, a final written
warning, a final probation notice or other similar document. Your two
options are as follows: You may accept the probation and attempt to
improve and maintain your work performance to the level that management
finds acceptable or you may elect to waive this opportunity and receive
a special separation arrangement. The special separation arrangement
will allow you to avoid the probationary period, ending your active
employment immediately; in exchange for a release, you will receive
half of the severance shown in the Schedule of Severance Pay set forth
in Section 5(A) of this Plan. Upon your request, your manager will give
you a written special separation agreement to review and consider. The
Plan Administrator or designee has full, sole discretion as to the
content of the special separation arrangement.
If you wish to request the special separation arrangement, the request
must be made in writing and must be received by your manager no later
than 28 days before the end of your final probation for poor work
performance. For example, if you have been told you have 60 days to
improve or be placed on final probation, your request for the special
severance arrangement must be received by your manager no later than
the second calendar day after you are placed on a final 30 day
probation.
If you do not elect the special separation arrangement and you do not
successfully complete the probation, your employment will be terminated
for poor work performance and you will not be eligible to receive any
notice or severance pay under this Plan.
6. NOTICE OR PAY IN LIEU OF NOTICE. In addition to being eligible for severance
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pay as provided above, at the Company's discretion, a Covered Employee will
normally receive either four weeks notice and be required to perform such
services as may be requested by the Company, or pay in lieu of notice equal to
four weeks of Weekly Base Pay. Any notice period provided shall be considered
active employment for the purpose of this Plan. A notice period of more or less
than four weeks, and/or notice pay of more or less than four weeks, may be
provided at the sole discretion of the Plan Administrator or designee.
7. FORM AND TIMING OF PAYMENT OF SEVERANCE PAY. Severance pay will be paid in
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periodic payments according to your regular payroll schedule and at your
semi-monthly pay rate and in accordance with the Company's semi-monthly pay
cycle ("PERIODIC PAYMENT"), up to your final Periodic Payment. If the date for
your final Periodic Payment falls in the middle of a semi-monthly pay cycle, you
will be paid a pro-rated amount of such final Periodic Payment, based on the
number of days in the particular cycle.
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Notwithstanding the foregoing, the Company reserves the right at any time to pay
the remaining severance pay in a single lump sum payment, to the extent
determined appropriate in the sole discretion of the Plan Administrator or
designee.
Periodic Payment of severance pay will commence as soon as practicable after the
Effective Date. Where the Company exercises its right to make a lump sum payment
of severance pay after the commencement of Periodic Payment, such lump sum will
be paid as soon as practicable after the Company exercises such right.
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In the event of your death while you are receiving Periodic Payment of severance
pay, the amount of severance pay remaining shall be paid, subject to applicable
law, in a single lump sum payment to your spouse, if any, or to such other
beneficiary or beneficiaries designated by you in writing, or if you are not
married or failing such designation, to your estate.
In the event you secure employment other than with the Company while receiving
Periodic Payment, you must notify the Company. Upon such notification, the
Company generally will make a single lump sum payment to you of all remaining
severance pay.
In the event you retire under the applicable Company retirement plan while
receiving Periodic Payment, the Company will pay you any remaining severance pay
in a single lump sum payment.
Any severance payment provided hereunder will be subject to applicable federal,
state and local taxes, which will be withheld from such payment where required
by applicable law as determined in the sole discretion of the Plan Administrator
or designee. In addition, any severance payment provided hereunder will be
offset by reducing such payment by any outstanding amount that you owe to the
Company for whatever reason.
8. EMPLOYEE BENEFIT PLAN COVERAGE WHILE RECEIVING SEVERANCE PAY. Except as
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otherwise provided in this Plan, as long as you are receiving Periodic Payment
of severance pay under this Plan, you will continue to be eligible for
participation in Company employee benefit plans in effect on the Effective Date,
in accordance with the applicable provisions of such plans. You will not be
eligible to participate in any Company salary continuation, short-term or
long-term disability plans, the Company business travel accident plan or any new
employee benefit plan or any improvement to any existing employee benefit plan
adopted by the Company after the Effective Date.
If a lump sum payment of severance pay is made, eligibility to participate in
all Company benefit plans ends.
Deductions for benefit plans for which you remain eligible will continue while
you are receiving Periodic Payment of severance pay, subject to the maximum time
periods and other eligibility requirements as specified by the terms of the
respective plans in effect as of the Effective Date.
9. EXCLUDED COMPENSATION PLANS, PROGRAMS, ARRANGEMENTS AND PERQUISITES. During
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the period you are receiving Periodic Payment of severance pay, unless
specifically authorized by the Company in writing, you will not be eligible to
accrue any vacation or participate in any (A) bonus program; (B) service
recognition program; (C) special termination program; (D) tax or financial
advisory services; (E) new or revised compensation program that may be
introduced after the Effective Date; or (F) other employee compensation program,
plan, arrangement, practice, policy or perquisite. The period during which you
are receiving Periodic Payment of severance pay shall not be counted as service
for purposes of any Company long-term incentive compensation awards outstanding
as of the Effective Date. Notwithstanding the preceding sentence, during such
period you will continue to be eligible to vest in any outstanding unvested
deferred restricted stock units (bonus swap), as well as any outstanding
unvested stock option awards except (i) any options awarded to you on December
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17, 1997 or July 19, 2000, and (ii) any other options that are designated under
the terms of the award of such options as ineligible for continued crediting of
service during Periodic Payment of severance pay. Also during such period, you
will continue to be eligible to exercise any outstanding vested stock option
awards, except to the extent
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that (a) such options first expire under the applicable plan or program, or (b)
such options are designated
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under the terms of the award of such options as ineligible for continued
exercise during Periodic Payment of severance pay. Any unvested restricted stock
and unvested performance shares outstanding as of the Effective Date will be
canceled as of the Effective Date, except to the extent otherwise provided in
the applicable plan or program.
10. DIVESTITURE, CLOSURE, RELOCATIONS.
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If the Company or a subsidiary or affiliate or division of the Company or a
portion thereof at which you are employed is sold or divested in a transaction
that does not qualify as a Change of Control under Section 11 hereof, and you
are not offered a Comparable Position (as defined in Section 4) either with the
Company, the acquiror, or the divested unit, you are eligible for severance pay
under Section 5(A) of this Plan (provided that you are not otherwise ineligible
for severance pay for any of the reasons described in Section 4 of this Plan).
Eligibility may be forfeited at the sole discretion of the Plan Administrator or
designee if you voluntarily terminate employment prior to the Effective Date.
Severance payments and related benefits will not be provided under this Plan if
you continue employment with, or are hired on the Effective Date by, or refuse
employment of a Comparable Position with, the Company, the acquiror or the
divested unit.
The provisions of this Section 10 shall apply to all sales and divestitures
(whether accomplished as sales of assets, sales of corporate entities or any
other method), unless such sale or divestiture qualifies as a Change of Control
under Section 11 hereof, in which event only the provisions of Section 11 shall
apply.
If the entire Company or the portion of the Company at which you are employed is
closed or relocated and you are not offered a Comparable Position by the
Company, you will be provided severance pay under Section 5(A) of this Plan
(provided that you are not otherwise ineligible for severance pay for any of the
reasons described in Section 4 of this Plan). Eligibility may be forfeited at
the sole discretion of the Plan Administrator or designee if you voluntarily
terminate employment prior to the Effective Date. Severance payments and related
benefits will not be provided if you are offered a Comparable Position with the
Company and you accept or refuse the Comparable Position.
11. ADDITIONAL SEVERANCE PAY IN THE EVENT OF A CHANGE OF CONTROL
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(A) ADDITIONAL SEVERANCE PAY. In the event of a Change of Control (as
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defined below), a Covered Employee who within the three year period
following such Change of Control either is 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 due to
Disability (as defined in The Hartford Investment and Savings Plan), or
voluntarily terminates employment with the Company for Good Reason (as
defined below), shall be provided severance pay equal to the sum of:
(i) the amount provided under the Schedule of Severance Pay set forth
in Section 5(A), and (ii) the additional amounts provided for in this
Section 11, subject to the limitations imposed by Section 11(D).
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(B) ADDITIONAL WEEKS OF WEEKLY BASE PAY. Subject to Section 11(D), a
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Covered Employee referred to in Section 11(A) shall receive the
following amount, based on his or her Years of Service as of the
Effective Date, up to a combined maximum of 78 weeks of Weekly Base
Pay:
YEARS OF SERVICE ADDITIONAL WEEKS OF WEEKLY BASE PAY
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- Less than 2 - 2 additional weeks
- 2 or more - 1 additional week for each Year of Service
(C) PRO RATA PORTION OF TARGET BONUS. Subject to Section 11(D), a
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Covered Employee referred to in Section 11(A) shall receive the
Pro-Rata Portion of the Target Bonus, which shall be equal to the
product of: (i) the "TARGET BONUS," which shall mean the annual bonus
determined as a percentage of annual base salary based on the annual
target bonus percentage established for Employee under the Executive
Bonus Program or the Performance Share Program (or any similar or
successor plan, policy or program) for the calendar year in which the
Effective Date occurs, or if no such annual target bonus percentage is
established, based on the highest actual bonus percentage awarded to
the Employee under the applicable bonus plan, policy or program for the
last three full calendar years prior to the Effective Date, multiplied
by (ii) the "PRO RATA PORTION," which shall mean a fraction (the
"SERVICE FRACTION"), the numerator of which is equal to the number of
rounded months in such calendar year which have elapsed as of the
Effective Date, and the denominator of which is 12; provided that if
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the Effective Date occurs in the last quarter of any calendar year, the
Pro-Rata Portion of the Target Bonus shall mean the amount determined
under the above formula or, if greater, the product of: (a) the annual
bonus that would have been paid to the Employee based on actual
performance for such calendar year, and (b) the Service Fraction.
(D) REDUCTION OF SEVERANCE PAY TO REDUCED AMOUNT IN CERTAIN
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CIRCUMSTANCES.
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(I) DETERMINATION OF EXISTENCE OF REDUCED AMOUNT.
Notwithstanding anything herein to the contrary, in the event
that Arthur Andersen or such other nationally recognized
public accounting firm as designated by the Company (the
"ACCOUNTING FIRM") shall determine that a Covered Employee's
receipt of the Payments would subject such Covered Employee to
tax under Section 4999 of the Code (as defined below), the
Accounting Firm shall determine whether some amount of the
aggregate Plan Payments meets the definition of Reduced Amount
(defined below).
(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 Plan Payments (as defined below) shall be
reduced to such Reduced Amount. The Company shall promptly
give the Covered Employee notice to that effect and a copy of
the detailed calculation thereof, and the Covered Employee may
then elect, in his or her sole discretion, which and how much
of the aggregate Plan Payments shall be eliminated or reduced
(as long as after such election the Present Value of the
aggregate Plan Payments equals the Reduced Amount), and shall
advise the
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Company in writing of his or her election within ten days of
receipt of such notice. If no such election is made by the
Covered Employee within such ten-day period, the Company may
elect which portion of such Plan Payments shall be eliminated
or reduced (as long as after such election the Present Value
of the aggregate Plan Payments equals the Reduced Amount) and
shall notify the Covered Employee promptly of such election.
All determinations made by the Accounting Firm under this
Section shall be binding upon the Company and the Covered
Employee and shall be made within 60 days of the applicable
termination of the employment of the Covered Employee. As
promptly as practicable following such determination, the
Company shall pay to or distribute for the benefit of the
Covered Employee such Plan Payments as are then due to the
Covered Employee under the Plan and shall promptly pay to or
distribute for the benefit of the Covered Employee in the
future such Plan Payments as become due to the Covered
Employee under this Plan.
(III) CONSEQUENCES OF OVERPAYMENT OR UNDERPAYMENT OF AGGREGATE
SEVERANCE. If 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(D) (i) hereof, it is possible that amounts will have been
paid or distributed by the Company to or for the benefit of
the Covered Employee pursuant to the Plan which should not
have been so paid or distributed ("Overpayment"), or that
additional amounts which will have not been paid or
distributed by the Company to or for the benefit of the
Covered Employee 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 the Covered Employee which 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 to or for the benefit of the
Covered Employee shall be treated for all purposes as a loan
to the Covered Employee which the Covered Employee shall repay
to the Company together with interest at the applicable
federal rate provided for in Section 7872(f)(2) of the Code;
provided, however, that no such loan shall be deemed to have
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been made and no amount shall be payable by the Covered
Employee to the Company if and to the extent such deemed loan
and payment would not either reduce the amount on which the
Covered Employee is subject to tax under Section 1 and Section
4999 of the Code or generate a refund of such taxes. 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 to or for the benefit of the
Covered Employee 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(D) shall be borne by the Company.
(E) FORM AND TIMING OF SEVERANCE PAY. The additional weeks of Weekly
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Base Pay provided for under Section 11(B) shall be paid in a single
lump sum immediately following the date of the applicable involuntary
termination. The Pro-Rata Portion of the Target Bonus provided for
under Section 11(C) shall be paid as follows: (i) if the Effective Date
occurs in the first, second or third
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calendar quarter of any particular calendar year, then the Pro-Rata
Portion of the Target Bonus shall be paid in a single lump sum no later
than 10 days following the Effective Date; or (ii) if the Effective
Date occurs in the fourth calendar quarter of any particular calendar
year, then the Pro-Rata Portion of the Target Bonus shall be paid in a
single lump sum 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 31 of the
calendar year immediately following the end of such fourth calendar
quarter. The Tax Reimbursement Payment provided for under Section 11(D)
shall be paid at the time specified in Section 11(D).
(F) DEFINITIONS. For purposes of this Section 11, the following terms
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shall have the following meanings:
"ACT" means the Securities Exchange Act of 1934, as amended.
"BASE SALARY" means the amount a Covered Employee is entitled
to receive from the Company as wages or salary on an
annualized basis as consideration for the Covered Employee's
services, including earned but deferred wages or salary, but
excluding all bonus, overtime, and incentive compensation.
"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: (i) a Person shall
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not be deemed the Beneficial Owner of any security as a result
of an agreement, arrangement or understanding to vote such
security (a) 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 (b) 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 (a) or (b) 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 (ii) 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.
"CHANGE OF CONTROL" means the occurrence of any of the
following events:
(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 Hartford or a subsidiary of The
Hartford or any employee benefit plan sponsored by
The Hartford or a subsidiary of The Hartford, is the
Beneficial Owner directly or indirectly of twenty
percent or more of the outstanding stock of The
Hartford entitled to vote in the election of
directors of The Hartford;
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(II) any Person, other than The Hartford or a
subsidiary of The Hartford or any employee benefit
plan sponsored by The Hartford or a subsidiary of The
Hartford, shall purchase shares pursuant to a tender
offer or exchange offer to acquire any stock of The
Hartford (or securities convertible into stock) for
cash, securities or any other consideration, provided
that after consummation of the offer, the Person in
question is the Beneficial Owner of fifteen percent
or more of the outstanding stock of The Hartford
entitled to vote in the election of directors of The
Hartford (calculated as provided in paragraph (d) of
Rule 13d-3 under the Act in the case of rights to
acquire stock);
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(III) the stockholders of The Hartford shall approve
(a) any consolidation or merger in which The Hartford
is not the continuing or surviving corporation or
pursuant to which shares of stock of The Hartford
entitled to vote in the election of directors of The
Hartford would be converted into cash, securities or
other property, other than a consolidation or merger
of The Hartford in which holders of such stock of The
Hartford immediately prior to the consolidation or
merger have the same proportionate ownership of stock
of the surviving corporation entitled to vote in the
election of directors immediately after the
consolidation or merger as immediately before, or (b)
any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of
all or substantially all the assets of The Hartford;
or
(IV) within any 12 month period, the persons who were
directors of The Hartford immediately before the
beginning of such period (the "INCUMBENT DIRECTORS OF
THE HARTFORD") shall cease (for any reason other than
death) to constitute at least a majority of the board
of directors of The Hartford or the board of
directors of any successor to The Hartford, provided
that any director of The Hartford who was not a
director of The Hartford at the beginning of such
period shall be deemed to be an Incumbent Director of
The Hartford if such director (a) was elected to the
board of directors of The Hartford by, or on the
recommendation of or with the approval of, at least
two-thirds of the directors of The Hartford who then
qualified as Incumbent Directors of The Hartford
either actually or by prior operation of this clause
(iv), and (b) was not designated by a Person who has
entered into an agreement with The Hartford to effect
a transaction described in the immediately preceding
clause (iii) hereof.
"CODE" means the Internal Revenue Code of 1986, as amended.
"GOOD REASON" means the occurrence of any of the following after the
occurrence of a Change of Control: (i) a reduction in the Covered
Employee's Base Salary below the Required Base Salary; (ii) a greater
than 10% reduction in the level of the Total Compensation offered to
the Covered Employee in comparison to the Total Compensation enjoyed by
the Covered Employee immediately prior to the Change of Control; or
(iii) the Company's requiring the Covered Employee to be based at any
office or location more than 50 miles from the location at which he or
she performed services immediately prior to the Change of Control,
except for travel reasonably required in the performance of the Covered
Employee's responsibilities.
"NET AFTER-TAX RECEIPT" means the Present Value of a Payment net of all
taxes imposed on the Covered Employee with respect thereto under
Sections 1 and 4999 of the Code and under applicable state and local
laws, determined by applying the highest marginal rate under Section 1
of the Code and under state and local laws which applied to the Covered
Employee's taxable income for the immediately preceding taxable year,
or such other rate(s) as the Covered Employee shall certify, in the
sole discretion of the Covered Employee, as likely to apply to the
Covered Employee in the relevant tax year(s).
"PAYMENT" means any payment or distribution in the nature of
compensation to or for the benefit
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of the Covered Employee, whether paid or payable pursuant to this Plan
or otherwise.
"PERSON" has the meaning ascribed to such term in Section 3(a)(9) of
the Act, as supplemented by Section 13(d)(3) of the Act; provided,
however, that Person shall not include (i) The Hartford, any subsidiary
of The Hartford or any other Person controlled by any of the foregoing,
(ii) any trustee or other fiduciary holding securities under any
employee benefit plan of The Hartford or of any subsidiary of The
Hartford, or (iii) a corporation owned, directly or indirectly, by the
stockholders of The Hartford in substantially the same proportion as
their ownership of securities of The Hartford.
"PLAN PAYMENT" means a Payment paid or payable pursuant to this Plan
(disregarding Section 11(D)).
"PRESENT VALUE" means such value as determined in accordance with
Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of 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.
"REQUIRED BASE SALARY" means with respect to any Covered Employee the
higher of (i) the Covered Employee's Base Salary as in effect
immediately prior to the Change of Control, or (ii) the Covered
Employee's highest Base Salary in effect at any time thereafter.
"TERMINATION FOR CAUSE" means, for purposes of this Section 11 only,
the following: a termination of a Covered Employee's employment due to
(i) the Covered Employee's conviction of a felony; (ii) an act or acts
of extreme dishonesty or gross misconduct on the Covered Employee's
part which result or are intended to result in material damage to the
Company's business or reputation; or (iii) repeated material violations
by the Covered Employee of his or her obligations to devote his or her
full attention during normal business hours to the business and affairs
of the Company and to use his or her best efforts to perform faithfully
and efficiently the responsibilities assigned to such Covered Employee
except for time away from work authorized by Company policy or state or
federal law, which violations are demonstrably willful and deliberate
on the Covered Employee's part and which result in material damage to
the Company's business or reputation.
"THE HARTFORD" means The Hartford Financial Services Group, Inc., or a
successor by merger, purchase or otherwise.
"TOTAL COMPENSATION" means the aggregate of a Covered Employee's Base
Salary, Target Bonus (as defined in Section 11(C) hereof), and the
value of any long-term incentive compensation award (including any
option award) made to the Employee under any The Hartford 2000
Incentive Stock Plan (or any successor plan, policy or program), such
value to be determined as of the date such award was made.
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12. REHIRING. If you are rehired by the Company while receiving Periodic Payment
--------
of severance you will no longer be entitled to severance pay under this Plan;
provided, however, that if you are rehired by the Company following a
termination in connection with a Change of Control, you will not be required
pursuant to the following paragraph to reimburse the Company as a condition to
your rehire if you already have received a lump sum payment of severance pay.
If a lump sum payment of severance pay was made to you, you will be required to
reimburse the Company in an amount equal to the number of weeks of Weekly Base
Pay provided to you under the Schedule of Severance Pay, less an amount
calculated by multiplying such number of weeks of Weekly Base Pay by the number
of weeks elapsing from the Effective Date to your rehire date. Such
reimbursement must be made as a condition to your being rehired.
13. OFFSET. Any severance pay provided to you under this Plan shall be offset by
------
reducing such amount by any severance pay, termination pay or similar pay or
allowance which you receive or are entitled to receive (A) under any other
Company plan, policy, practice, program or arrangement; (B) pursuant to any
individual written employment agreement or other written agreement with the
Company; or (C) by virtue of any law, custom or practice excluding, however, any
unemployment compensation which you may receive as a state unemployment award.
Any severance pay provided to you under this Plan shall also be offset by
reducing such amount by any severance pay, termination pay or similar pay or
allowance you may have received as a result of any prior termination of
employment with the Company unless, as of the Effective Date, you have been
re-employed for a period exceeding one year, in which case you will be eligible
to receive severance pay according to the above Schedule of Severance Pay to the
extent permitted by this Plan.
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. Except as provided above
with regard to WARN and similar laws, notice pay under this Plan shall not be
subject to offset.
Notwithstanding the foregoing, in the event of a Change of Control, the
Company's obligation to make the severance payments and any other payments to
you under this Plan upon any termination following a Change of Control and
otherwise to perform its obligations hereunder upon any termination following a
Change of Control shall not be affected by any set-off for monies owed to the
Company, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against you or others and, in no event shall you be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to you under any of the provisions of this Plan and such
amounts shall not be reduced whether or not you obtain other employment.
14. ADMINISTRATION OF PLAN. Responsibility for administration of this Plan rests
----------------------
with Hartford Fire Insurance Company's Group Senior Vice President, Human
Resources (or other person holding a position with similar responsibilities) or
his or her designee (the "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,
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all interpretations and decisions by the Plan Administrator shall be final,
conclusive and binding on all parties affected thereby.
15. TERMINATION OR AMENDMENT. The Plan Administrator shall have the power to
------------------------
make any 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 Hartford Fire Insurance Company.
Hartford Fire Insurance Company through the appropriate committee of its Board
of Directors, reserves the right in its sole discretion to terminate, modify,
amend or change this Plan ("PLAN CHANGE") at any time without prior notice and
no consent of any person shall be required, except that (A) no such Plan Change,
-----------
and no Plan amendment made by the Plan Administrator, may reduce or adversely
affect severance pay for any employee who is already receiving severance pay
under the Plan prior to such Plan Change or amendment, and (B) in the event of a
Change of Control as defined in Section 11 above, no modification, amendment or
other change shall be made to this Plan, and this Plan shall not be terminated,
for a period of three years following the date of such Change of Control.
16. MISCELLANEOUS.
-------------
o In cases where severance pay is provided under this Plan, pay in lieu
of any unused vacation entitlement will be paid to you in a single lump
sum payment by the time severance pay ceases. Such lump sum payment
will not have the effect of extending your service with the Company for
any purpose.
o Benefits under this Plan are paid for by the Company entirely from its
general assets.
o 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.
OTHER IMPORTANT INFORMATION
- ---------------------------
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.
ANY EMPLOYEE WHO IS NOT OBLIGATED TO CONTINUE EMPLOYMENT WITH THE COMPANY UNDER
A FORMAL WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY RETAINS THE RIGHT TO
TERMINATE 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, WITH OR WITHOUT CAUSE, SUBJECT TO APPLICABLE LAW.
NO SUPERVISOR OR MANAGER HAS ANY AUTHORITY TO ENTER INTO AN EMPLOYMENT
AGREEMENT, WRITTEN OR VERBAL, OR TO MAKE ANY AGREEMENT OR REPRESENTATIONS
CONTRARY TO THE FOREGOING, UNLESS IT IS AUTHORIZED IN WRITING BY THE CHIEF
EXECUTIVE OFFICER OR PRESIDENT OF THE COMPANY AND SUCH AGREEMENT IS IN WRITING.
FURTHER NO COMPANY DOCUMENT, COMMUNICATION OR PUBLICATION SHOULD BE UNDERSTOOD
AS, OR CONSTRUED AS, EXTENDING SUCH A REPRESENTATION.
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