THE HARTFORD SENIOR EXECUTIVE SEVERANCE PAY PLAN
This document describes your benefits under The Hartford Senior Executive
Severance Pay Plan, and includes the text of the Plan and other important
information.
REV. JANUARY 16, 2004
TABLE OF CONTENTS
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TEXT OF THE HARTFORD SENIOR EXECUTIVE SEVERANCE PAY PLAN
Page
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1. Purpose...............................................................3
2. Application of Plan...................................................3
3. Covered Employees ....................................................3
4. Severance Pay Upon Termination of Employment..........................4
5. Schedule of Severance Pay.............................................6
6. Notice or Pay in Lieu of Notice.......................................7
7. Form of Payment of Severance Pay......................................7
8. Employee Benefit Plan Coverage While Receiving Severance Pay..........8
9. Excluded Employee Compensation Plans, Programs, Arrangements
and Perquisites....................................................8
10. Divestiture, Closure, Relocations.....................................9
11. Disqualifying Conduct.................................................9
12. Release...............................................................9
13. Offset................................................................9
14. Administration of Plan...............................................10
15. Termination or Amendment.............................................10
16. Miscellaneous........................................................11
OTHER IMPORTANT INFORMATION
1. NOTICE...............................................................11
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THE HARTFORD SENIOR EXECUTIVE
SEVERANCE PAY PLAN
1. PURPOSE
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The purpose of The Hartford Senior Executive Severance Pay Plan (the
"Plan") is to assist in occupational transition by providing severance
pay for senior executives covered by this Plan whose employment is
terminated under conditions set forth in this Plan.
2. APPLICATION OF PLAN
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This Plan is effective October 1, 1997. Any termination of employment
of a Covered Employee 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 where this Plan is expressly superseded by a Key Executive
Employment Protection Agreement with the Company, or an individual
written employment contract or other written agreement with the
Company. To the extent that this Plan is expressly superseded by any of
the foregoing agreements or contracts, no severance shall be payable
hereunder, and the provisions of this Plan will otherwise be deemed
null and void and without effect.
3. COVERED EMPLOYEES
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You are a Covered Employee under this Plan if you are an "Employee" (as
defined below) who (1) qualifies as an "Eligible Employee" (as defined
below), (2) is paid on a salaried basis, and (3) is identified as a
Tier Two executive. 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 who would otherwise qualify as a Covered
Employees, but for being on leave of absence, will be considered a
Covered Employees for purposes of this Plan.
For purposes of the Plan, "Employee" means any person regularly
employed by Hartford Fire Insurance Company or any of its designated
subsidiaries or affiliates (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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For purposes of the Plan, "Eligible Employee" means an Employee
employed by the Company; provided, however, that except as the Board of
Directors or the Committee may otherwise provide on a basis uniformly
applicable to all persons similarly situated, Eligible Employee shall
not include any "Ineligible Person," which means all of the following:
(1) A person who is paid on an hourly basis; or (2) A person who: (A)
holds a position with the Company's "HARTEMP" Program, or (B) is hired
to work for the Company through a temporary employment agency, or (C)
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 (3) A
person who is a leased employee (within the meaning of Code Section
414(n)(2)) 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 (4) A 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,
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
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If the Company terminates your employment and you sign a Release
acceptable to the Company, 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: serious violations of Company 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, inimical to the best interests of the
Company, or illegal;
o refuse a Similar Position (as defined herein) offered as
alternative employment with the Company. For purposes of this
Plan, "Similar Position" shall mean a position of the same
base salary rate and same opportunity for incentive with
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o similar duties, or having different duties which, in
management's judgment, the employee is able to perform and
which is located within a 50-mile radius of the previous
position's location;
o terminate employment with the Company prior to the date
selected by the Company as your last day of active employment
("Effective Date");
o are terminated while on a leave of absence (paid or unpaid)
after 26 weeks of such leave;
o are mandatorily retired on or after your Normal Retirement
Date (as defined herein) where legally permitted, or are
terminated with an Effective Date on or after your Normal
Retirement Date. "Normal Retirement Date" shall mean the first
of the month which coincides with or follows the employee's
65th birthday;
o are terminated following acceptance or refusal of employment
or continued employment with a purchaser in connection with
any sale or divestiture described in Section 10 hereof;
o are eligible for greater severance payments under the terms of
a Key Executive Employment Protection Agreement with the
Company, or 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 leave of absence, no severance pay will be provided under this Plan.
No severance pay will be provided under this Plan upon any termination
of employment as a result of your death, or as a result of your
Disability as defined in The Hartford Investment and Savings Plan, as
may be amended from time to time (the "Savings Plan").
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5. SCHEDULE OF SEVERANCE PAY
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Covered Employees will be provided severance pay in accordance with the
following Schedule of Severance Pay which sets forth the months of Base
Pay which are provided to a Covered Employee based upon the Covered
Employee's Years of Service as of the Effective Date.
Years of Service Months of Base Pay
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Less than 4 . . . . . . 12
4 . . . . . . 13
5 . . . . . . 14
6 . . . . . . 15
7 . . . . . . 16
8 . . . . . . 17
9 . . . . . . 18
10 . . . . . . 19
11 . . . . . . 20
12 . . . . . . 21
13 . . . . . . 22
14 . . . . . . 23
15 or more . . . . . . 24
The severance payment provided 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.
"Base Pay" shall mean your annual base salary at the Effective Date
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.
Notwithstanding the above Schedule of Severance Pay, in no event (i)
shall months of Base Pay provided to you exceed the number of months
remaining between the Effective Date and your Normal Retirement Date,
or (ii) shall severance pay exceed the equivalent of twice your total
annual compensation during the year immediately preceding the Effective
Date.
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6. NOTICE OR PAY IN LIEU OF NOTICE
-------------------------------
Except as provided in this Plan or under a Key Executive Employment
Protection Agreement with the Company, or an individual written
employment contract or other written agreement with the Company, you
shall not be entitled to any notice of termination or pay in lieu
thereof. At the sole discretion of the Plan Administrator or designee,
notice may be provided.
7. FORM OF PAYMENT OF SEVERANCE PAY
--------------------------------
Severance pay shall be paid in periodic payments according to the
regular payroll schedule ("Periodic Payment"), provided that the
Company reserves the right at any time to pay the remaining severance
pay in a discounted lump sum.
Any discounted lump sum paid under this Plan shall be equal to the
present value of the remaining Periodic Payments of severance pay as
determined by the Company using an interest rate equal to the prime
rate at Citibank in effect on the date the Company notifies you that it
is exercising its right to pay severance in the discounted lump sum.
Periodic Payment of severance pay will commence or the discounted lump
sum will be paid on the next day following the Effective Date, except
that where the Company exercises its right to pay the discounted lump
sum after the commencement of Periodic Payments, it will be paid
promptly after the Company exercises such right.
In the event of your death during the period you are receiving Periodic
Payment of severance pay, the amount of severance pay remaining shall
be paid, subject to applicable law, in a discounted 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 and failing
such designation, to your estate.
During the time period that you are receiving Periodic Payment of
severance pay, or for which you receive severance pay by lump sum, you
must continue to be available to render reasonable assistance to the
Company, consistent with the level of your prior position with the
Company, at times and locations that are mutually acceptable. In
requesting such services, the Company will take into account any other
commitments which you may have. After the Effective Date and normal
wind up of your former duties, you will not be required to perform any
regular services for the Company.
In the event you secure employment other than with the Company while
receiving severance pay, you must notify the Company. Upon such
notification the Company generally will make a single discounted lump
sum payment to you of all remaining severance pay. Periodic Payment of
severance pay will cease if you are rehired by the Company.
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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 discounted lump sum payment.
8. EMPLOYEE BENEFIT PLAN COVERAGE WHILE RECEIVING SEVERANCE PAY
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Except as otherwise provided herein, as long as you are receiving
Periodic Payment, you will continue to be eligible for participation in
Company employee benefit plans in effect as of the Effective Date,
including without limitation, any non-qualified excess or supplemental
benefit plans, 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 employee benefit plans ends.
Deductions for continuing group life and medical/dental/health
insurance and participation in the Savings Plan remain available while
receiving Periodic Payment of the severance pay, subject to the maximum
time periods as specified by the terms of the respective plans in
effect as of the Effective Date.
9. EXCLUDED EMPLOYEE COMPENSATION PLANS, PROGRAMS, ARRANGEMENTS AND
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PERQUISITES
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During the period you are receiving Periodic Payment of severance pay,
you will not be eligible to accrue any paid time off or participate in
any (i) bonus program; (ii) special termination programs; (iii) tax or
financial advisory services; (iv) new awards under any long-term
incentive compensation plan or program of the Company; (v) new or
revised executive compensation programs that may be introduced after
the Effective Date; or (vi) any other executive compensation program,
plan, arrangement, practice, policy or perquisites unless specifically
authorized by the Company in writing. 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 (a) any options awarded to you on December 17, 1997 or July 19,
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2000, and (b) 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 that (I) such options
first expire under the applicable plan or program, or (II) such options
are designated 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.
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10. DIVESTITURE. CLOSURE, RELOCATIONS
---------------------------------
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,
and if (i) you accept employment or continued employment with the
purchaser, or (ii) refuse employment or continued employment with the
purchaser on terms and conditions substantially comparable to those in
effect immediately preceding the sale or divestiture, you shall not be
provided severance pay hereunder or any related benefits described in
Section 8 or Section 9 of this Plan. The provisions of this Section 10
apply to all sales and divestitures (whether accomplished as sales of
assets, sales of corporate entities or any other method), other than
any sale or divestiture that qualifies as a Change of Control under The
Hartford 2000 Incentive Stock Plan (as may be amended from time to
time).
11. DISQUALIFYING CONDUCT
---------------------
If, during the period you are receiving Periodic Payment of severance
pay, you (i) conduct yourself in a manner which is inimical to the best
interests of the Company, or which adversely affects those interests;
(ii) make statements, either oral or written, which are false or
misleading or which disparage the Company; (iii) fail to comply with
any Company Covenant Against Disclosure and Assignment of Rights to
Intellectual Property or other similar policy or undertaking of the
Company; (iv) without the Company's prior consent, induce any employees
of the Company to leave their Company employment; or (v) fail to comply
with applicable provisions of the Code of Conduct or other similar
policy or undertaking of the Company, or any other applicable corporate
policy of the Company, then the Company will have no further obligation
to provide severance pay.
12. RELEASE
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No severance pay will be provided under this Plan unless you execute
and deliver to the Company a Release, satisfactory to the Company, in
which you discharge and release the Company, its affiliates and the
Company's directors, officers, employees and employee benefit plans
from all claims (other than for benefits to which you are entitled
under any Company employee benefit plan) arising out of your employment
or termination of employment.
13. OFFSET
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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 (i) under
any other Company plan, policy, practice, program or arrangement; (ii)
pursuant to any Key Executive Employment Protection Agreement with the
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Company, or any individual written employment agreement or other
written agreement with the Company; or (iii) 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 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 to you under any
Company or statutory disability plan, policy, practice, program or
arrangement where any such payment is made for any period of time after
the Effective Date.
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 individual with similar responsibilities) or his 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.
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 Hartford Fire Insurance Company. The Company,
through its Board of Directors, 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 except
that no such Plan Change, and no Plan amendment made by the Plan
Administrator, may reduce or adversely affect severance pay for any
employee whose employment terminates within two years of the effective
date of such Plan Change or amendment, provided that such Executive was
a Covered Employee under this Plan on the date of such Plan Change or
amendment. 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 (as defined in The Hartford
Incentive Stock Plan, as may be amended from time to time) 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 (as defined in The Hartford
Incentive Stock Plan,
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as 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
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o In cases where severance pay is provided under this Plan, pay
in lieu of any unused paid time off entitlement will be paid
to you in a single lump sum payment after severance pay
ceases. Such lump sum payment will not have the effect of
extending your Company service for any purpose.
o Benefits under this Plan are paid for entirely by the Company
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
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NOTICE
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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 HIS/HER EMPLOYMENT UNDER A FORMAL
WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY RETAINS THE RIGHT TO TERMINATE
THEIR 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 VERBAL, 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.
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