THE HARTFORD
DEFERRED STOCK UNIT PLAN
ARTICLE I
CREATION AND PURPOSE
1.1 Creation of the Plan . The Plan is created
effective July 31, 2009, as authorized by the Committee.
1.2 Purpose of the Plan . The purpose of the Plan
is to provide compensation, the amount of which is determined by
reference to the value of the Stock, in an amount that the Company
determines to be appropriate to attract and retain Employees of
superior ability. The Plan is structured consistent with the
limitations and restrictions on employee compensation arrangements
imposed by the Emergency Economic Stabilization Act of 2008 and the
TARP Standards for Compensation and Corporate Governance Interim
Final Rule issued by the U.S. Department of the Treasury on June
10, 2009. The purpose of the Plan shall be effected through awards
representing the contractual right to receive cash payments based
on the value of a specified number of shares of Stock (the
“Units”).
ARTICLE II
DEFINITIONS
“ Account ” means an account
maintained on behalf of a Participant on the books of the Company
in accordance with the terms hereof .
“ Award Date ” means the date
designated by the Committee for the award of Restricted Units
pursuant to the Plan.
“ 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 ” shall have the
meaning assigned by the Incentive Stock Plan.
“ Code” means the Internal Revenue
Code of 1986, as amended.
“ Committee ” means the Compensation
and Personnel Committee of the Board, or such other Committee as
the Board may designate to administer the Plan.
“ Company ” means The Hartford
Financial Services Group, Inc. and its successors and assigns.
“ Deferred Units ” shall have the
meaning assigned by Article III of the Plan.
“ Dividend Equivalents ” means an
amount credited with respect to an outstanding Unit equal to the
cash dividends paid or property distributions awarded upon one
share of Stock.
“ Employee ” means a 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.
“ EESA ” means the Emergency Economic
Stabilization Act of 2008, as amended by the American Recovery and
Reinvestment Act of 2009, and as it may be further amended, and
rules and other guidance promulgated by the U.S. Department of the
Treasury thereunder.
“ Fair Market Value ” shall have the
meaning assigned by the Incentive Stock Plan.
“ Grant Date ” shall have the meaning
assigned by Article III of the Plan.
“ Incentive Stock Plan ” means The
Hartford 2005 Incentive Stock Plan, as amended from time to time,
and any successor plan thereto.
“ Normal Vesting Date ” means the
third anniversary of the Award Date, or such other date that the
Committee, or the Chairman and Chief Executive Officer or the
Executive Vice President, Human Resources with respect to awards to
Employees other than Tier 1 and Tier 2 Employees, may designate
with respect to any particular award of Restricted Units.
“ Participant ” means an Employee who
receives an award of Units pursuant to Article III or IV of
the Plan.
“ Participating Company ” shall have
the meaning assigned by the Incentive Stock Plan.
“ Plan ” means this The Hartford
Deferred Stock Unit Plan, as it may be amended from time to
time.
“ Restricted Units ” shall have the
meaning assigned by Article IV of the Plan.
“ Retirement ” shall have the meaning
assigned by the Incentive Stock Plan.
“ Stock ” shall have the meaning
assigned by the Incentive Stock Plan.
“ Subsequent Guidance ” means rules
and other guidance under EESA issued after the Plan’s
adoption.
“ Terminated for Cause ” shall mean a
termination of employment for any of the following reasons:
(i) conviction of or entering a plea of guilty or nolo
contendere to a felony, a crime of moral turpitude, dishonesty,
breach of trust or unethical business conduct, or any crime
involving the business of the Company or its affiliates;
(ii) in the performance of duties or otherwise to the
detriment of the Company or its affiliates, engaging in
(A) willful misconduct, (B) willful or gross neglect,
(C) fraud, (D) misappropriation, (E) embezzlement,
or (F) theft; (iii) willfully failing to adhere to the
policies and practices of the Company or to devote substantially
all business time and effort to the affairs thereof, or disobeying
the directions of management to do either of the foregoing,
(iv) being adjudicated in any civil suit to have committed, or
acknowledging in writing or in any agreement or stipulation the
commission of, any theft, embezzlement, fraud or other intentional
act of dishonesty involving any other person; or (v) willfully
violating the Code of Ethics and Business Conduct of the
Company.
“ The Hartford ” shall mean the
Company and its subsidiaries, and their successors and assigns.
“ Total Disability ” shall have the
meaning assigned by the Incentive Stock Plan.
“ Units ” shall have the meaning
assigned by Article I of the Plan.
ARTICLE III
DEFERRED UNITS
3.1 Award of Deferred Units . The Committee may,
in its discretion, award to an Employee contractual rights to
receive in accordance with the Plan cash equal to the value of a
number of whole and/or fractional shares of Stock (the
“Deferred Units”) determined in accordance with this
Section 3.1. With respect to each Employee to whom Deferred
Units will be granted, the Committee shall establish a dollar
amount to be provided in Deferred Units in respect of services
performed in each regular pay period. Deferred Units shall be
earned ratably over a year (or such portion thereof as shall be
specified by the Committee), based on the number of regular pay
periods occurring during such year (or specified period). The sum
of the amounts earned in respect of each payroll period shall be
applied on a quarterly basis (or more frequently if so required by
Subsequent Guidance) to determine the number of Deferred Units to
be credited to the Participant’s Account, by dividing such
accumulated sum of payroll credits for the preceding calendar
quarter (or shorter period if required by Subsequent Guidance) by
the Fair Market Value of the Stock on the second business day
following the filing of the Company’s periodic reports on SEC
Form 10-Q or 10-K applicable to or filed immediately following the
calendar quarter in which the amounts are earned (each, a
“Grant Date”). Should Subsequent Guidance require that
Deferred Units be credited more frequently than on a quarterly
basis, the Committee shall determine the applicable Grant Date, and
the formula set forth in the immediately preceding sentence shall
be applied using the Fair Market Value of the Stock on such Grant
Date. Deferred Units will be credited as of a Grant Date in respect
of any earned pay credits regardless of whether the
Participant’s employment shall have terminated as of the
applicable Grant Date.
3.2 Crediting of Deferred Units to Account . The
number of whole and/or fractional Deferred Units awarded to a
Participant pursuant to this Article III as of each applicable
Grant Date shall be credited to the Participant’s Account as
of such date.
3.3 Vesting of Deferred Units . The rights of a
Participant with respect to any Deferred Units credited to his or
her Account shall be fully vested and nonforfeitable at all times.
To the extent provided in Article VI, a Participant shall
become entitled to receive cash corresponding to any Deferred Units
credited to the Participant’s Account on the applicable date
identified in Article VI. Notwithstanding the above, the
Deferred Units credited to a Participant’s Account shall be
forfeited should the Participant be Terminated for Cause, to the
extent permitted by EESA and other applicable state and federal
law.
ARTICLE IV
RESTRICTED UNITS
4.1 Award of Restricted Units . Except as provided
below, as of the Award Date, the Committee may, in its discretion,
award to an Employee contractual rights to receive in accordance
with the Plan cash equal to the value of a number of whole and/or
fractional shares of Stock (the “Restricted Units”).
Unlike Deferred Units, Restricted Units are intended to be
incentive compensation that vests over time (which is provided in
accordance with applicable exceptions under EESA), and consequently
are subject to a substantial risk of forfeiture (as defined in
regulations under Section 83 of the Code) in the manner
specified below.
4.2 Crediting of Restricted Units to Account . The
number of whole and/or fractional Restricted Units awarded to a
Participant pursuant to this Article IV as of the Award Date
shall be credited to the Participant’s Account as of such
date.
4.3 Vesting of Restricted Units . Except as
otherwise provided in the Plan, a Participant’s rights with
respect to Restricted Units shall vest on the Normal Vesting Date,
although a Partici
