Exhibit 10.2
THE HARTFORD
FORM OF NON-QUALIFIED STOCK OPTION, PERFORMANCE
SHARE AND RESTRICTED STOCK UNIT AWARD
[DATE]
[Key Employee]
[Address]
[City, State, Zip]
I am pleased to inform you that
effective [DATE], the Compensation and Personnel Committee (the
“Committee”) of the Board of Directors of The Hartford
Financial Services Group, Inc. (“The Hartford”)
approved an award on your behalf under The Hartford’s
Long-Term Incentive Compensation Program. Your award is comprised
of three parts: a stock option, performance shares and restricted
stock units.
You have been granted a
non-qualified option to purchase all or any portion of x,xxx
shares of common stock of The Hartford under the terms of The
Hartford 2005 Incentive Stock Plan (the “Plan”) at an
exercise price of $[XXX] per share, the New York Stock Exchange
closing price of The Hartford’s common stock on [DATE] (the
date of grant of the option). [ TIER 1 EXECUTIVES : This
option will become exercisable at the later of (i) [third
anniversary of the date of the grant], or (ii) the date the
closing market price of The Hartford’s common stock on the
New York Stock Exchange has equaled or exceeded 125% of the
exercise price for a period of ten consecutive trading days.
However, any unexercised portion of your option expires in full on
[ten years following the date of the grant].] [ TIER 2
EXECUTIVES : This option will become exercisable in three
consecutive annual installments, each equal to one-third of the
shares subject to the option, as follows: one-third will become
exercisable one year after the date of grant, an additional
one-third will become exercisable two years after the date of
grant, and the remaining one-third of the option will become
exercisable three years after the date of grant. However, any
unexercised portion of your option expires in full on [ten years
following the date of the grant].]
You have also been granted
x,xxx [operating division] performance shares of The
Hartford’s common stock under the terms of the Plan. This is
a contingent award, and the extent to which you may ultimately
receive all or any of these performance shares depends upon
continued employment and whether and to what extent, as determined
by the Committee, the following performance objectives are achieved
over the three-year performance period: [performance objectives]
relative to targets established by the Committee.
You have also been granted
x,xxx restricted stock units of The Hartford. Each
restricted stock unit award represents a contractual right to
receive, pursuant to the terms of the Plan, one share of common
stock of The Hartford per restricted stock unit at the end of the
three-year period from [DATE – DATE] (the “Service
Period”). This is a contingent award, and remains subject to
forfeiture pending completion of the Service Period. Your
restricted stock unit account will be credited with dividend
equivalents, which are subject to the same terms and conditions as
the restricted stock units to which they relate. These dividend
equivalents will be deemed reinvested in a number of restricted
stock units determined based on the fair market value of The
Hartford common stock on the date the corresponding common stock
dividend is payable to stockholders.
For performance shares and
restricted stock units, if your active employment ceases during the
applicable three-year period, and you then satisfy the rules for
Total Disability or, if your were hired before 2002, Retirement
under the Plan, you will receive, following the end of the period,
a prorated award for the portion of the period you were actively
employed.
The estimated value of your
long-term award (the option, the performance shares and the
restricted stock units) as of the date of grant was $[XXX] .
Ultimately, the value of the award will depend on the stock price
at the time of option exercise (or at the end of the Service Period
in the case of restricted stock units), whether and to what extent
the performance share objectives are achieved, and other
factors.
Enclosed is information related
to performance shares. More information on option awards and
restricted stock units can be obtained from The Hartford’s
Intranet Directory as follows:
From iConnect, select the HR
Source tab. From the center of the screen, click on the small red
box which says Visit HR Source Online. Select the Compensation tab.
Select the appropriate item from the drop-down menu under the
Long-Term Incentives. Some of the information and documents
available include the following: The Hartford 2005 Incentive Stock
Plan Prospectus, Beneficiary Designation Forms, Service Provider to
Contact, and award treatment upon termination of
employment.
You are strongly urged to review
all of the above documents, as well as the other information
provided, at your earliest convenience.
If you cannot access the
information, please contact Executive Compensation, The Hartford,
HO-1-141, Hartford Plaza, Hartford, CT 06115, (860) 547-4560,
for paper copies.
– 2 –
Please note that this letter,
along with the Plan and the enclosed information relating to
performance shares, constitute your option, performance share and
restricted stock unit agreement with The Hartford. Although you are
not required to sign any formal documents, your option and
performance share and restricted stock unit grants are subject to
all of the terms and conditions of the Plan, as it may be amended
from time to time, and all of the rules, procedures and
interpretations of the Plan that the Committee may adopt from time
to time. You have already received information about exercising
your options from the Plan’s stock option broker. These
exercise procedures must be followed, and may change from time to
time.
Your selection as an award
recipient is significant recognition of your past and anticipated
future contributions to The Hartford’s success. Please accept
this award with my warm congratulations.
Sincerely,
