THE
HARTFORD EMPLOYEE STOCK PURCHASE PLAN
(Including
amendments effective January 1, 2009)
ARTICLE
I
PURPOSE AND APPROVAL
1.1
Purpose of the Plan. The
purpose of The Hartford Employee Stock Purchase Plan is to provide
a method whereby Employees of the Company may acquire a proprietary
interest in the Company through the purchase of Shares of common
stock of The Hartford. The Plan is intended to qualify as an
“Employee Stock Purchase Plan” as defined in the Code.
The provisions of the Plan shall be construed so as to extend and
limit participation in a manner consistent with the requirements of
the Code.
1.2
Approval of the Plan. The
Plan was approved by ITT Corporation, as sole shareholder of The
Hartford (formerly named ITT Hartford Group, Inc.), on
December 15, 1995. The Plan was adopted by the Board on
July 18, 1996.
For
purposes of the Plan, the following terms shall have the following
meanings:
“Account”
means
the account maintained by the Company for a Participant pursuant to
Section 3.3.
“Act”
means
the Securities Exchange Act of 1934, as amended.
“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: (A) a Person shall not be deemed the Beneficial Owner of
any security as a result of an agreement, arrangement or
understanding to vote such security (i) 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
(ii) 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 (i) or (ii) 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 (B) 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.
“Board”
means
the Board of Directors of The Hartford.
“Change
of Control” means
the occurrence of any of the following:
A.
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 (within the meaning of Section 13(d) of the Act),
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 of forty percent or more of
the outstanding stock of The Hartford entitled to vote in the
election of directors of The Hartford;
B.
Any
Person (within the meaning of Section 13(d) of the Act), 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, directly or indirectly,
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 shares);
C.
Any
merger, consolidation, recapitalization or reorganization of The
Hartford shall be consummated, other than any such transaction
immediately following which the persons who were the Beneficial
Owners of the outstanding securities of The Hartford entitled to
vote in the election of directors of The Hartford immediately prior
to such transaction are the Beneficial Owners of at least 55% of
the total voting power represented by the securities of the entity
surviving such transaction entitled to vote in the election of
directors of such entity (or the ultimate parent of such entity) in
substantially the same relative proportions as their ownership of
the securities of The Hartford entitled to vote in the election of
directors of The Hartford immediately prior to such transaction;
provided that, such continuity of ownership (and preservation of
relative voting power) shall be deemed to be satisfied if the
failure to meet such threshold (or to preserve such relative voting
power) is due solely to the acquisition of voting securities by an
employee benefit plan of The Hartford, such surviving entity or any
subsidiary of such surviving entity;
D.
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 shall be consummated; or
E.
Within
any 24 month period, the persons who were directors of The
Hartford immediately before the beginning of such period (the
“Incumbent Directors”) shall cease (for any reason
other than death) to constitute at least a majority of the Board or
the board of directors of any successor to The Hartford, provided
that any director who was not a director at the beginning of such
period shall be deemed to be an Incumbent Director if such director
(i) was elected to the Board by, or on the recommendation of
or with the approval of, at least two-thirds of the directors who
then qualified as Incumbent Directors either actually or by prior
operation of this clause (E), and (ii) was not designated by a
Person who has entered into an agreement with The Hartford to
effect a transaction described in clause (C) or clause
(D) of this definition of Change of Control;
provided,
however, that notwithstanding any provision in this Plan to the
contrary, in the event of a Change of Control as described in
clause (C) or clause (D) of this definition of Change of
Control, in the case of a Participant whose employment
involuntarily terminates on or after the date of a shareholder
approval described in either of such clauses but before the date of
a consummation described in either of such clauses, the date of
termination of such a Participant’s employment shall be
deemed for purposes of the Plan to be the day following the date of
the applicable consummation.
“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
pursuant to Article VI.
“Company”
means
The Hartford and Hartford Fire Insurance Company, and any other
entity designated as a Participating Corporation pursuant to
Section 3.1, and any successor of any of the foregoing by
merger or purchase or otherwise.
“Compensation”
means
“Compensation” as defined in The Hartford Investment
and Savings Plan, excluding (i) amounts deferred under any
nonqualified deferred compensation plan, (ii) performance
shares payable pursuant to The Hartford Incentive Stock Plan and
performance units payable pursuant to The Hartford Performance Unit
Plan, (iii) bonuses, and (iv) any other payments
designated by the Committee.
2
“Effective
Date” means
the effective date of the Plan identified in
Section 7.10.
“Eligible
Employee” means
an Employee described in Section 3.2.
“Employee”
means
any person regularly employed by the Company and having an
employment relationship principally with the Company within the
meaning of Code Section 423 (subject to the exclusion of such
persons or classes of persons as the Committee may determine that
is consistent with The Hartford Investment and Savings Plan, Code
Section 423 and other applicable law), but shall not include
any person who performs services for the Company as an independent
contractor or under any other non-employee
classification.
“Exercise
Price” means
the purchase price for Shares purchased pursuant to the exercise of
an Option identified in Section 4.1.
“Fair
Market Value” means,
with respect to Shares on any particular date, the closing market
price of the Shares on the New York Stock Exchange on such date or
the nearest prior business day on which trading occurred on the New
York Stock Exchange.
“Offering”
means
an offering to Participants of Options to purchase Shares under
Section 4.1.
“Offering
Commencement Date” means,
prior to 2009, the first business day of the calendar quarter
applicable to the Offering. Effective with respect to any Offering
Period commencing on or after January 1, 2009, “Offering
Commencement Date” means the first business day of January or
July (or such other month that the Plan Administrator shall
designate), with respect to any Offering commencing in such
month.
“Offering
Termination Date” means,
prior to 2009, the last business day of the calendar quarter
applicable to the Offering. Effective with respect to any Offering
Period beginning on or after January 1, 2009, “Offering
Termination Date” means the last business day of the sixth
calendar month (or such other month, not earlier than the third
month nor later than the twelfth month) ending after the Offering
Commencement Date that the Plan Administrator shall
designate.
“Option”
means
an option to purchase Shares granted pursuant to the
Plan.
“Participant”
means
an Eligible Employee who has elected to participate in the Plan
pursuant to Section 3.3, and who has not become an ineligible
Employee or withdrawn from participation in the Plan pursuant to
Article III.
“Participating
Corporation” means
a corporation designated pursuant to
Section 3.1(B).
“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 The
Hartford, (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 proportions as their ownership of securities
of The Hartford.
“Plan”
means
The Hartford Employee Stock Purchase Plan.
“Plan
Administrator” has
the meaning described in Article VI.
3
“Potential
Change of Control” means:
A.
A
Person shall commence a tender offer, which if successfully
consummated, would result in such Person being the Beneficial Owner
of at least 15% of the stock of The Hartford entitled to vote in
the election of directors of The Hartford;
B.
The
Hartford enters into an agreement, the consummation of which would
constitute a Change of Control;
C.
Solicitation
of proxies for the election of directors of The Hartford by anyone
other than The Hartford, which, if such directors were elected,
would result in the occurrence of a Change of Control as described
in clause (E) of the definition of “Change of
Control” above; or
D.
Any
other event shall occur which is deemed to be a Potential Change of
Control by the Board, the Committee, or any other appropriate
committee of the Board in its sole discretion.
“Share”
means
one share of common stock ($.01 par value) of The
Hartford.
“The
Hartford” means
The Hartford Financial Services Group, Inc., and any successor by
merger or purchase or otherwise.
“The
Hartford Income Protection Plan” means
The Hartford Income Protection Plan, as may be amended from time to
time, certain standards of which are to be applied to an Employee
to the extent provided herein, regardless of whether such Employee
is covered under such Plan.
“The
Hartford Investment and Savings Plan” means
The Hartford Investment and Savings Plan, as may be amended from
time to time, certain standards of which are to be applied to an
Employee to the extent provided herein, regardless of whether such
Employee is covered under such Plan.
“Transfer
Agent” means
the officially designated transfer agent of The
Hartford.
ARTICLE
III
ELIGIBILITY AND PARTICIPATION
3.1
Granting of Options to Employees
A.
Granting of Options to Company Employees Only.
To the
extent permitted by the Plan, Options to purchase Shares hereunder
shall only be granted to Employees of the Company.
B.
Designation of Additional Participating Corporations.
Designations
of additional corporations whose Employees may be granted Options
to purchase Shares to the extent permitted hereunder may be made
from time to time by the Committee from among the group of
corporations which includes (i) The Hartford’s
subsidiary corporations as of the Effective Date of the Plan, and
(ii) corporations that become parent or subsidiary
corporations of The Hartford after the Effective Date of the
Plan.
C.
Employee Rights and Privileges. All
Employees granted Options under the Plan shall have the same rights
and privileges, except that the Committee may from time to time
provide for differences in the rights and privileges of Employees
granted Options hereunder, so long as such differences do not
jeopardize the qualification of the Plan under Code
Section 423 or violate other applicable law.
4
3.2
Eligibility of Employees. Employees
who qualify as Eligible Employees pursuant to this Section shall be
eligible to elect to participate in the Plan in accordance with
Section 3.3.
A.
Eligible Employee Defined. Except
as otherwise required by Code Section 423 or other applicable
law, an Employee shall be considered an Eligible Employee for
purposes of participation in the Plan on the first date such
Employee has completed at least six months of service as an
Employee of the Company, provided, however, that (i) except as
the Board 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 any person who
performs services for the Company as an independent contractor or
under any other non-employee classification, and (ii) such
Employee shall be eligible to open an account with the registered
broker-dealer firm and/or banking entity designated as recordkeeper
for the Plan.
B.
Rehired Employees. If an
Eligible Employee who has ceased to be an Employee becomes an
Employee again on a date thereafter, such Employee automatically
shall become an Eligible Employee effective as of the Offering
Commencement Date following such date.
C.
Employees Deemed Ineligible for Participation
(i) Receipt
of Hardship Withdrawal. If an
Employee receives a “safe harbor” hardship withdrawal
under The Hartford Investment and Savings Plan, or any other plan
maintained by the Company or its affiliates that is qualified under
Code Section 401(k), and such Employee ceases certain savings
for a period of not less than 6 months as required by any such
plan, such Employee shall be deemed an ineligible Employee for such
6 month period. Such Employee shall no longer be deemed an
ineligible Employee as of the Offering Commencement Date following
the end of such period.
(ii) Receipt
of Benefits for Total Disability. An
Employee shall be deemed an ineligible Employee during the period
such Employee receives benefits for a total disability under The
Hartford Income Protection Plan or any other long-term disability
plan or program maintained by the Company or its affiliates. Such
an Employee who is also a Participant shall be deemed to have filed
a withdrawal form in accordance with Section 3.4(A) on the
date such Employee first begins receiving such Long-Term Disability
benefits, and such deemed filing shall have the same consequences
as would the actual filing of a withdrawal form pursuant to
Section 3.4(A). As of the Offering Commencement Date following
the end of the period during which such benefits are received, such
Employee shall no longer be deemed an ineligible Employee pursuant
to this Section.
(iii) 5%
Owners. No
Option shall be granted hereunder to any Employee who, immediately
after the Option is granted, would own, within the meaning of Code
Section 424(d), shares possessing 5% or more of the total
combined voting power or value of all classes of stock of The
Hartford or any affiliate thereof. For purposes of this Section,
Shares that an Employee would be entitled to purchase on the
Offering Termination Date applicable to an Option th
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