SEPARATION AGREEMENT AND GENERAL
RELEASE
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1.1
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You, Thomas M. Marra
(“you” or “your”) and management of The
Hartford Financial Services Group, Inc., including its direct and
indirect subsidiaries, (“The Hartford”), have had a
series of conversations about your employment. As a result of those
conversations, and consistent with the terms of the Amended and
Restated Employment Agreement dated September 7, 2006
(“2006 Employment Agreement”), as well as the October
31, 2008 Amendment to the 2006 Employment Agreement
(“Amendment”), you and The Hartford agree to enter into
this Separation Agreement and General Release (the
“Agreement”) under the following terms. The terms of
the 2006 Employment Agreement and the Amendment, including but not
limited to The Hartford’s and your obligations under Section
10(j) of the 2006 Employment Agreement, as amended by the
Amendment, if The Hartford or any of its subsidiaries participates
in the Troubled Assets Relief Program or any similar program under
the Emergency Economic Stabilization Act of 2008 or similar
legislation, apply in all cases except as otherwise provided below.
For the avoidance of doubt, nothing in this Agreement is intended
to be duplicative of any of the amounts that would otherwise be
payable to you under the 2006 Employment Agreement.
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1.2
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You and The Hartford have mutually
agreed that your employment will terminate as a Termination Without
Cause (as defined in Section 5(d) the 2006 Employment Agreement)
effective July 3, 2009 (“Separation Date”), at
which point you will be eligible to and will retire from The
Hartford.
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1.3
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Following the Separation Date, you
will receive payments and benefits per your 2006 Employment
Agreement as provided for a Termination Without Cause with
retirement eligibility.
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2.0
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THE HARTFORD’S
OBLIGATIONS
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2.1
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Transition Period and Separation
Date . You
will remain employed with your current title during a transition
period continuing through the Separation Date (“Transition
Period”).
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2.1.1.
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Duties . During the Transition Period, you
will perform services commensurate with your position, skills and
experience as assigned by the Chief Executive Officer, including
participating in meetings as reasonably requested and supporting
organizational changes that are underway. During the Transition
Period, you will be allowed a reduced schedule as mutually agreed
by you and management, but in no event shall such work amount be
less than twenty percent (20%) of the average amount of time that
you provided services to The Hartford for the three (3) year
period immediately before the Transition Period. The Hartford
warrants that it will assign you services as provided above so that
you satisfy the above minimum requirements.
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2.1.2
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New Opportunities
. During the Transition
Period, you shall be permitted to explore future employment
opportunities, including doing preliminary work on new business
opportunities, which are intended to begin following the Separation
Date, provided that you do not receive any compensation during the
Transition Period for any such activities or become an employee of
any person or entity other than The Hartford during the Transition
Period. Section 9(a) of the 2006 Employment Agreement or any
similar provision in any other agreement with The Hartford
(including without limitation in any equity grants or benefit
plans) shall not apply to such activities.
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2.2.1
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Transition Pay
. During the Transition
Period described above, you will continue to be paid your current
base salary amount, minus required withholding for taxes and
deductions (“Transition Pay”).
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2.2.2
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Severance Payment
. In accordance with
Section 5 of the 2006 Employment Agreement in connection with
a Termination Without Cause, you will receive a one-time lump sum
payment equal to two times the sum of your current base salary and
2009 target bonus (“Severance Payment”). The Severance
Payment will be paid within the 10-day period following
January 4, 2010. This Severance Payment will not be considered
earnings for purposes of The Hartford’s benefit
plans.
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2.2.3
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Vested Benefits
Enhancement . Since your Termination Without
Cause will occur after July 1, 2009, you acknowledge that you
will not be entitled to the Vested Benefits Enhancement (as defined
in Section 5(d) of the 2006 Employment Agreement) upon such
termination.
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2.2.4
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Bonus . As previously discussed, you will
not receive a bonus for 2008, but you will receive a pro rata
target bonus for 2009 following the Separation Date. This bonus
will not be considered earnings for purposes of The
Hartford’s benefit plans. This bonus shall be paid in
accordance with the terms of the 2006 Employment
Agreement.
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2.3
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Other Benefits and
Compensation . During and after the Transition
Period, you will be eligible for certain employee benefit plans
only as detailed below.
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2.3.1
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Pension . You will receive pension payments
in accordance with the Rule of 80 pursuant to the terms of the
applicable pension plans. Subject to you providing services
pursuant to Section 2.1.1 above, The Hartford represents that
you will satisfy the Rule of 80.
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Page 2 of 10
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2.3.2
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LongTerm Incentives
. You will not receive
an equity award for 2009. Otherwise, all of your outstanding equity
and equity-based awards will continue to operate in accordance with
the terms of the applicable plan and the underlying agreements.
Your employment will continue through the end of the Transition
Period to the extent relevant in determining your rights in respect
of these awards and agreements.
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2.3.2.1
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HIG Restricted Stock
Units .
Restricted stock units will vest pro rata as of the Separation
Date.
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2.3.2.2
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Stock Options
. Unvested stock
options will be treated in accordance with Section 5(d) of your
2006 Employment Agreement as applicable to a Termination Without
Cause, based on retirement eligibility as of the Separation
Date.
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2.3.2.3
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Performance Shares
. Performance shares
will vest pro rata as of the Separation Date, based on retirement
eligibility.
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2.3.2.4
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Restricted Stock
. All restrictions on
any outstanding shares will immediately lapse on the Separation
Date.
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2.4
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Paid Time Off
(“PTO”) . During the Transition Period, you
will be deemed to have used any 2008 carryover and/or 2009 accrued
PTO such that as of your Separation Date, there will be no accrued
PTO remaining to be paid.
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2.5
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Income Protection and Business
Travel Accident Plans . Pursuant to the terms of the
applicable plan, you are covered under these plans only for a
disability arising or an accident occurring through the last day
you are actively working. You will be considered actively working
during the Transition Period.
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2.6
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Welfare Benefits Continuation and
Retiree Health . Following the Separation Date, you
will receive Welfare Benefits Continuation as provided in Section
5(d) of your 2006 Employment Agreement. During the Transition
Period, your welfare benefits will continue in the same manner and
to the same extent as immediately prior to beginning of the
Transition Period, except to the extent such welfare benefits are
modified for all executive officers of The Hartford. The Hartford
acknowledges that you have qualified for retiree health and shall
have the rights to such benefits upon any termination, subject to
the terms of the applicable retiree heath plan as modified from
time to time.
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2.7
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Outplacement Assistance
. The Hartford will
provide you with twelve (12) months of outplacement services
through an executive outplacement firm to be selected by The
Hartford and by you. To initiate the process, please contact Eileen
Whelley at (860) 547-4125. You may begin utilizing these
services at any time following your execution of this
Agreement.
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Page 3 of 10
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3.1
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Trade Secrets and Confidential
Information .
You agree to abide by the terms and provisions as set forth in
Section 9(b) of the 2006 Employment Agreement.
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You hereby acknowledge your
obligations under The Hartford’s Insider Trading Policies,
which will remain in effect and enforceable, notwithstanding
Section 5.4, the termination of your employment with The
Hartford or the occurrence of the Separation Date. You further
agree that your obligations under The Hartford’s Insider
Trading Policies shall continue until the second trading day
following the filing by The Hartford with the SEC of The
Hartford’s quarterly report on Form 10-Q for the quarter
ended September 30, 2009.
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3.2
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Return of Hartford
Property .
You agree to abide by the terms and provisions as set forth in
Section 9(d) of the 2006 Employment Agreement.
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3.3
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No Assistance
. You agree that
neither you nor anyone acting at your direction will knowingly and
intentionally encourage or induce any person or entity, including
but not limited to any past, present, or prospective employee,
consultant, contractor, vendor, supplier, customer or competitor of
any Hartford Entity to bring claims, complaints or suits of any
kind whatsoever against said entities relating to matters related
to your employment period with The Hartford. You further agree that
you will not knowingly or intentionally provide information or
consulting advice or assist in any manner any such person or entity
asserting
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