EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT, dated as of July 1, 1997, by and between Hartford
Life, Inc. ("Hartford Life") and The Hartford Financial Services Group, Inc.
("The Hartford") (collectively, the "Company"), both Delaware corporations, and
Lowndes ▇. ▇▇▇▇▇ ("Executive").
W I T N E S S E T H:
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WHEREAS, the Company wishes to recognize the substantial services
that Executive has provided to the Company; and
WHEREAS, the Company desires that Executive continue to perform
such services and to enter into an agreement embodying the terms of such
employment (the "Agreement"); and
WHEREAS, Executive desires to continue such employment and enter
into such Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company and Executive hereby agree as follows:
1. EMPLOYMENT.
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(A) AGREEMENT TO EMPLOY. Upon the terms and subject to the conditions of
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this Agreement, the Company hereby agrees to continue to employ Executive
and Executive hereby agrees to continue his employment by the Company.
(B) TERM OF EMPLOYMENT. Except as otherwise provided below, the Company
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shall employ Executive for the period commencing on July 1, 1997 (the
"Commencement Date") and ending on the third anniversary of the
Commencement Date. At the expiration of the original term or any extended
term (each a "Renewal Date"), Executive's employment hereunder shall be
extended automatically, upon the same terms and conditions, for successive
one-year periods, unless either party shall give written notice to the
other of its intention not to renew such employment at least fifteen months
prior to such Renewal Date. Without limiting the generality of the
foregoing, upon the occurrence of a Change of Control (as defined below),
the term of this Agreement shall be extended automatically without any
action by either party until the third anniversary of such Change of
Control. Notwithstanding the foregoing, if not previously terminated
pursuant to Sections 1(b), 5(a) or 6(a), the term of this Agreement shall
terminate on the last day of the month in which Executive attains age 65,
and such a
termination upon Executive reaching age 65 shall be deemed to be a
Termination Due to Retirement for purposes of this Agreement. The period
during which Executive is employed pursuant to this Agreement, including
any extension thereof in accordance with this Section 1(b), shall be
referred to as the "Employment Period."
2. POSITION AND DUTIES.
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During the Employment Period, Executive shall serve as Vice-Chairman of The
Hartford and President and Chief Executive Officer of Hartford Life, and/or in
such other position or positions with the Company or its affiliates commensurate
with his position and experience as the relevant Board of Directors of the
Company (the "Board") or the Chairman of the Company (the "Chairman") shall from
time to time specify. During the Employment Period, Executive shall have the
duties, responsibilities and obligations customarily assigned to individuals
serving in the position or positions in which Executive serves hereunder and
such other duties, responsibilities and obligations as the relevant Board or the
Chairman shall from time to time specify. Executive shall devote his full time
to the services required of him hereunder, except for vacation time and
reasonable periods of absence due to sickness, personal injury or other
disability, and shall use his best efforts, judgement, skill and energy to
perform such services in a manner consonant with the duties of his position and
to improve and advance the business and interests of the Company and its
affiliates. During the Employment Period, Executive shall comply with the Code
of Conduct of the Company. Unless and to the extent inconsistent with the terms
of any published Company policy or code of conduct as in effect on the date
hereof and as hereafter amended, nothing contained herein shall preclude
Executive from (a) serving on the board of directors of any business corporation
with the consent of the relevant Board or the Chairman, (b) serving on the board
of, or working for, any charitable or community organization, or (c) pursuing
his personal financial and legal affairs, so long as the foregoing activities,
individually or collectively, do not interfere with the performance of
Executive's duties hereunder or violate any of the provisions of Section 9
hereof.
3. COMPENSATION.
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(A) BASE SALARY. During the Employment Period, the Company shall pay Execu
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tive a base salary at the annual rate as in effect on the date hereof. The
annual base salary payable under this paragraph shall be reduced, however,
to the extent that Executive elects to defer such salary under the terms of
any deferred compensation or savings plan or arrangement maintained or
established by the Company or its
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affiliates. The relevant Board or the appropriate committee of the Board
may in its discretion periodically review Executive's base salary in light
of competitive practices, the base salaries paid to other executive
officers of the Company and the performance of Executive and the Company
and its applicable affiliates, and may, in its discretion, increase such
base salary by an amount it determines to be appropriate. Any such increase
shall not reduce or limit any other obligation of the Company hereunder.
Executive's base salary (as set forth above or as may be increased from
time to time) shall not be reduced following any Change of Control, but may
be reduced prior to a Change of Control solely pursuant to a cost-saving
plan or structural realignment of total compensation elements that includes
all senior executives and only to the extent that such reduction is
proportionate to the reductions applicable to other senior executives.
Executive's annual base salary payable hereunder, as it may be increased or
reduced from time to time as provided herein and without reduction for any
amounts deferred as described above, shall be referred to herein as "Base
Salary." The Company shall pay Executive the portion of his Base Salary not
deferred not less frequently than in equal monthly installments.
(B) ANNUAL BONUS. For each calendar year ending during the Employment
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Period, Executive shall have the opportunity to earn and receive an annual
bonus, based on the achievement of target levels of performance, equal to
the percentage of his Base Salary used to calculate such annual bonus as of
the date hereof. Executive's annual bonus opportunity may be increased
above such percentage from time to time by the relevant Board or the
appropriate committee thereof. Executive's annual bonus opportunity shall
not be reduced following any Change of Control, but may be reduced prior to
a Change of Control solely pursuant to a cost-saving plan or structural
realignment of total compensation elements that includes all senior
executives and only to the extent that such reduction is proportionate to
the reductions applicable to other senior executives. Executive's annual
bonus opportunity, as it may be increased or reduced from time to time as
provided herein, shall be referred to herein as "Target Bonus." The actual
bonus, if any, payable for any such year shall be determined in accordance
with the terms of the Company's Annual Executive Bonus Program or any
successor annual incentive plan (the "Annual Plan") based upon the
performance of the Company and/or its applicable affiliates and/or
Executive against target objectives established under such Annual Plan.
Subject to Executive's election to defer all or a portion of any annual
bonus payable hereunder pursuant to the terms of any deferred compensation
or savings plan or arrangement maintained or established by the Company or
its affiliates, any annual bonus payable under this Section 3(b) shall be
paid to Executive in accordance with the terms of the Annual Plan.
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(C) LONG-TERM INCENTIVE COMPENSATION. During the Employment Period,
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Executive shall participate in all of the Company's existing and future
long-term incentive compensation programs for key executives at a level
commensurate with his position with the Company and consistent with the
Company's then current policies and practices, as determined in good faith
by the relevant Board or the appropriate committee of the Board.
4. BENEFITS, PERQUISITES AND EXPENSES.
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(A) BENEFITS. During the Employment Period, Executive (and, to the extent
--------
applicable, his dependents) shall be eligible to participate in or be
covered under (i) each welfare benefit plan or program maintained or as
hereafter amended or established by the Company or its applicable
affiliates, including, without limitation, each group life,
hospitalization, medical, dental, health, accident or disability insurance
or similar plan or program of thereof, and (ii) each pension, retirement,
savings, deferred compensation, stock purchase or other similar plan or
program maintained or as hereafter amended or established by the Company or
its applicable affiliates, in each case to the extent that Executive is
eligible to participate in any such plan or program under the generally
applicable provisions thereof. Nothing in this Section 4(a) shall limit the
Company's right to amend or terminate any such plan or program in
accordance with the procedures set forth therein or as permitted by
applicable law.
(B) PERQUISITES. For each calendar year during the Employment Period,
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Executive shall be entitled to at least the number of paid vacation days
per year that Executive is entitled to as of the date hereof, and shall
also be entitled to receive such other perquisites as are generally
provided to him as of the date hereof or are hereafter provided to other
similarly situated senior executives of the Company in accordance with the
then current policies and practices of the Company.
(C) BUSINESS EXPENSES. During the Employment Period, the Company shall pay
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or reimburse Executive for all reasonable business expenses incurred or
paid by Executive in the performance of Executive's duties hereunder, upon
presentation of expense statements or vouchers and such other information
as the Company may require and in accordance with the generally applicable
policies and procedures of the Company.
(D) OFFICE AND SUPPORT STAFF. During the Employment Period, Executive shall
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be entitled to an office with furnishings and other material appointments,
and to secretarial and other assistance, at a level that is at least
commensurate with the foregoing provided to him as of the date hereof or is
hereafter provided to other similarly situated senior executives of the
Company.
(E) INDEMNIFICATION. The Company shall indemnify Executive and hold
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Executive harmless from and against any claim, loss or cause of action,
regardless whether asserted during or after the Employment Period, arising
from or out of Executive's performance as an officer, director or employee
of the Company or any of its affiliates or in any other capacity, including
any fiduciary capacity in which Executive serves at the request of the
Company, to the maximum extent permitted by applicable law and under the
Certificate of Incorporation and By-Laws of the Company, as may be amended
from time to time (the "Governing Documents"), provided that in no event
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shall the protection afforded to Executive be less than that afforded under
the Governing Documents as in effect on the Commencement Date.
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5. TERMINATION OF EMPLOYMENT.
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The provisions of this Section 5 shall apply prior to the occurrence of a Change
of Control and, if Executive is still in the Company's employ, shall again
become applicable upon the third anniversary of such Change of Control.
(A) EARLY TERMINATION OF THE EMPLOYMENT PERIOD. Notwithstanding Section
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1(b) hereof, the Employment Period shall end upon the earliest to occur of
(i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a
Voluntary Termination, (iv) a Termination Due to Retirement, (v) a
Termination Due to Disability, or (vi) a Termination Due to Death.
(B) NOTICE OF TERMINATION. Communication of termination under this Section
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5 shall be made to the other party by Notice of Termination in the case of
(i) a Termination For Cause, (ii) a Termination Without Cause, or (iii) a
Voluntary Termination.
(C) BENEFITS PAYABLE UPON TERMINATION; RULES FOR DETERMINING REASON FOR
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TERMINATION.
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(I) BENEFITS PAYABLE UPON TERMINATION. Following the end of the
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Employment Period pursuant to Section 5(a), Executive (or, in the
event of his death, his surviving spouse, if any, or if none, his
estate) shall be paid the type or types of compensation determined
to be payable in accordance with the following table, such payment
to be made in the form specified in such table and at the time
established pursuant to Section 7 hereof. Capitalized terms used
in such table shall have the meanings set forth in Section 5(d)
hereof.
(II) RULES FOR DETERMINING REASON FOR TERMINATION.
--------------------------------------------
(A) If a Voluntary Termination occurs on a date that
Executive is eligible for Retirement as defined in The
Hartford Investment and Savings Plan, as may be amended
from time to time, or any successor plan thereof (the
"Savings Plan"), such Voluntary Termination shall instead
be treated as a Termination Due to Retirement solely for
purposes of this Section 5.
(B) No Termination Without Cause shall be treated as a
Termination Due to Retirement or a Termination Due to
Disability for purposes of any Pro Rata Target Bonus,
Severance Payment, Equity Awards or Vested Benefits
Enhancement under this Section 5, notwithstanding the
fact that, either on, before or after the date of
termination of the Employment Period with respect
thereto, (I) Executive was eligible for Retirement as
defined in the Savings Plan, (II) Executive requested to
be treated as a retiree for purposes of the Savings Plan
or any other plan or program of the Company or its
affiliates, or (III) Executive or the Company could have
terminated Executive's employment in a Termination Due to
Disability hereunder.
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BENEFITS PAYABLE : NON-CHANGE OF CONTROL
BENEFIT: Accrued Pro Rata Target Severance Equity Awards
Salary Bonus Payment
======================== ============== ========================= ================ ==================================
FORM OF PAYMENT: Lump Sum Lump Sum Lump Sum Determined Under the Applicable
Plan
Termination For Payable Not Payable Not Payable Not Payable
Cause
Termination Payable Payable Payable Options / Restricted Stock:
Without Cause --------------------------
Payable
Other Equity Awards:
-------------------
Determined Under the
Applicable Plan
Voluntary Payable Determined Under Not Determined Under the
Termination the Applicable Plan Payable Applicable Plan
Termination Due Payable Determined Under Not Determined Under the
to Retirement the Applicable Plan Payable Applicable Plan
Termination Due Payable Payable Not Determined Under the
to Disability Payable Applicable Plan
Termination Due Payable Payable Not Determined Under the
to Death Payable Applicable Plan
BENEFITS PAYABLE : NON-CHANGE OF CONTROL
(Continued)
BENEFIT: Vested Benefits Vested Benefits Welfare
Enhancement Benefits
Continuation
======================== ============================== ======================== =================
FORM OF Determined Under the Lump Sum Determined
PAYMENT: Applicable Plan Under the
Applicable
Plan
Termination For Determined Under the Not Payable Not
Cause Applicable Plan Available
Termination Determined Under the Payable Available
Without Cause Applicable Plan
Voluntary Determined Under the Not Payable Not
Termination Applicable Plan Available
Termination Due Determined Under the Not Payable Available
to Retirement Applicable Plan
Termination Due Determined Under the Not Payable Available
to Disability Applicable Plan
Termination Due Determined Under the Not Payable Not
to Death Applicable Plan Available
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(D) DEFINITIONS.
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"ACCRUED SALARY" means any Base Salary earned, but unpaid, for
services rendered to the Company on or prior to the date on which
the Employment Period ends pursuant to Section 5(a) (other than
Base Salary deferred pursuant to Executive's election, as
contemplated by Section 3(a) hereof), plus any vacation pay
accrued by Executive as of such date.
"AVAILABLE" means that the particular benefit shall be made
available to Executive to the extent specifically provided herein
or required by applicable law.
"DETERMINED UNDER THE APPLICABLE PLAN" means that the
determination of whether a particular benefit, shall or shall not
be paid to Executive, and, where specifically required by this
Agreement, the timing or form of any benefit payment, shall be
made solely by application of the terms of the plan or program
providing such benefit, except to the extent that the terms of
such plan or program are expressly superseded or modified by this
Agreement.
"EQUITY AWARDS" means the outstanding stock option, restricted
stock, performance share and other equity or long-term incentive
compensation awards, if any, held by Executive as of the date of
his termination.
"ERPs" means any excess retirement plans maintained or as
hereafter amended or established by the Company or its applicable
affiliates.
"ESPs" means any excess investment and savings plans maintained or
as hereafter amended or established by the Company or its
applicable affiliates.
"LUMP SUM" means a single lump sum cash payment.
"NOT AVAILABLE" means that the particular benefit shall be not be
made available to Executive, except to the extent required by
applicable law.
"NOT PAYABLE" means (i) with respect to benefits other than Equity
Awards, such benefits shall not be paid or otherwise provided to
Executive, and (ii) with respect to Equity Awards, such Equity
Awards, to the extent unvested, unexercisable, or subject to
restrictions that have not yet lapsed, shall be forfeited and/or
canceled as of the date of termination of the Employment Period,
unless otherwise determined by the relevant Board or the
appropriate committee of the Board in its discretion.
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"NOTICE OF TERMINATION" means (i) in the case of a Termination For
Cause, a written notice given by the Company to Executive within
30 calendar days of the Company's having actual knowledge of the
events giving rise to such Termination For Cause, (ii) in the case
of a Termination Without Cause, a written notice given by the
Company to Executive at least 30 days before the effective date of
such Termination Without Cause, and (iii) in the case of a
Voluntary Termination, a written notice given by Executive to the
Company indicating the effective date of Executive's termination
of the Employment Period in such Voluntary Termination, such
effective date to be no earlier than 30 days following the date
such notice is received by the Company from Executive.
"PAYABLE" means (i) with respect to benefits other than those
described in clause (ii) of this paragraph, such benefits shall be
paid to Executive in the amount, at the time, and in the form
specified herein, and (ii) with respect to benefits described in
this clause (ii), the following shall apply solely in the event of
a Termination Without Cause, notwithstanding anything in the
applicable plan or program to the contrary: (A) with respect to
any outstanding stock options not yet expired as of the date of
termination of the Employment Period, Executive shall be treated
as though he remained in the employ of the Company for the two
year period following such date, and except to the extent that any
such options first expire during such period under the applicable
plan or program, (I) any such options that would have become
vested over such two year period solely by reason of Executive
remaining in the employ of the Company during such period shall
become immediately vested and nonforfeitable, (II) with respect to
any options that by their terms would vest if the stock of the
Company or an affiliate were to reach a specified market price,
such options shall become vested and nonforfeitable if and when
such stock reaches such price during such two year period, and
(III) Executive shall have an additional two years to exercise any
vested options (beyond the time to exercise such options permitted
under the applicable plan or program), and (B) with respect to any
restricted stock subject to restrictions that have not yet lapsed
as of the date of termination of the Employment Period, such
restrictions shall be deemed to have lapsed and such restricted
stock shall become immediately vested and nonforfeitable as of
such date.
"PRO-RATA TARGET BONUS" means an amount equal to the product of:
(i) an amount equal to the Target Bonus Executive would have been
entitled to receive under Section 3(b) for the calendar year in
which the Employment Period terminates, and (ii) a fraction (the
"Service Fraction"), the numerator
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of which is equal to the number of rounded months in such calendar
year which have elapsed as of the date of such termination, and
the denominator of which is 12; provided that, if the Employment
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Period terminates in the last quarter of any calendar year, the
Pro-Rata Target Bonus shall be the amount determined under the
above formula or, if greater, the product of: (A) the bonus that
would have been paid to Executive based on actual performance for
such calendar year, and (B) the Service Fraction.
"SEVERANCE PAYMENT" means an amount equal to two times the sum of:
(i) Executive's Base Salary at the rate in effect as of the date
of termination of the Employment Period, and (ii) Executive's
Target Bonus amount under Section 3(b) hereof for the calendar
year in which the Employment Period terminates.
"TERMINATION DUE TO DEATH" means a termination of Executive's
employment due to the death of Executive.
"TERMINATION DUE TO DISABILITY" means (i) a termination of
Executive's employment by the Company as a result of a
determination by the Board or the appropriate committee thereof
that Executive has been incapable of substantially fulfilling the
positions, duties, responsibilities and obligations set forth in
this Agreement on account of physical, mental or emotional
incapacity resulting from injury, sickness or disease for a period
of (A) at least four consecutive months, or (B) more than six
months in any twelve month period, or (ii) Executive's termination
of employment on account of Disability as defined in The Hartford
Investment and Savings Plan, as may be amended from time to time.
"TERMINATION DUE TO RETIREMENT" means Executive's termination of
employment on account of Executive's Retirement as defined in The
Hartford Investment and Savings Plan, as may be amended from time
to time.
"TERMINATION FOR CAUSE" means a termination of Executive's
employment by the Company for any of the following reasons: (i)
Executive is convicted of or enters a plea of guilty or nolo
----
contendere to a felony, a crime of moral turpitude, dishonesty,
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breach of trust or unethical business conduct, or any crime
involving the business of the Company or its affiliates; (ii) in
the performance of his duties hereunder or otherwise to the
detriment of the Company or its affiliates, Executive engages in
(A) willful misconduct, (B) willful or gross neglect, (C) fraud,
(D) misappropriation, (E) embezzlement, or (F) theft; (iii)
Executive willfully fails to adhere to the
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policies and practices of the Company or devote substantially all
of his business time and effort to the affairs thereof, or
disobeys the directions of the Board to do either of the
foregoing; (iv) Executive breaches this Agreement in any material
respect; (v) Executive is adjudicated in any civil suit to have
committeed, or acknowledges in writing or in any agreement or
stipulation his commission, of any theft, embezzlement, fraud or
other intentional act of dishonesty involving any other person; or
(vi) Executive violates the Code of Conduct of the Company.
"TERMINATION WITHOUT CAUSE" means any involuntary termination of
Executive's employment by the Company other than a Termination For
Cause, a Termination Due to Disability or a Termination Due to
Death.
"VESTED BENEFITS" means amounts that are vested or that Executive
is otherwise entitled to receive, without the performance by
Executive of further services or the resolution of a contingency,
under the terms of or in accordance with any investment and
savings plan or retirement plan of the Company or its affiliates,
and any ERPs or ESPs related thereto, and any deferred
compensation or employee stock purchase plan or similar plan or
program of the Company or its affiliates.
"VESTED BENEFITS ENHANCEMENT" means (i) a cash amount equal to the
present value, calculated using a discount rate equal to the then
prevailing applicable Federal rate as determined under Section
1274(d) of the Internal Revenue Code of 1986, as amended (the
"Code"), of the additional retirement benefits that would have
been payable or available to Executive under any ERPs, based on
(A) the age and service Executive would have attained or completed
had Executive continued in the Company's employ until the second
anniversary of the date of termination of the Employment Period,
and (B) where compensation is a relevant factor, his pensionable
compensation as of such date, such compensation to include, on the
same terms as apply to other executives, any Severance Payment
made to Executive, and (ii) solely for purposes vesting in any
benefits under any ESPs, Executive shall be treated as having
continued in the Company's employ until the second anniversary of
the date of termination of the Employment Period.
"VOLUNTARY TERMINATION" means any voluntary termination of
Executive's Employment by Executive pursuant to this Section 5,
other than a Termination Due to Retirement or a Termination Due to
Disability by Executive.
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"WELFARE BENEFITS CONTINUATION" means that until the second
anniversary of the date of termination of the Employment Period,
Executive and, if applicable, his dependents shall be entitled to
continue participation in the life and health insurance benefit
plans of the Company or its affiliates in which Executive and/or
such dependents were participating as of the date of termination
of the Employment Period, and such other welfare benefit plans
thereof in which the Company is required by law to permit the
participation of Executive and/or his dependents, (collectively,
the "Welfare Benefit Plans"). Such participation shall be on the
same terms and conditions (including the requirement that
Executive pay any premiums generally paid by an employee) as would
apply if Executive were still in the employ of the Company;
provided that the continued participation of Executive and/or his
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dependents in such Welfare Benefit Plans shall cease on such
earlier date as Executive may become eligible for comparable
welfare benefits provided by a subsequent employer. To the extent
that Welfare Benefits Continuation cannot be provided under the
terms of the applicable plan, policy or program, the Company shall
provide a comparable benefit under another plan or from the
Company's general assets.
6. TERMINATION FOLLOWING A CHANGE OF CONTROL OR POTENTIAL CHANGE OF CONTROL.
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This Section 6 shall apply (instead of Section 5) during the period commencing
upon a Change of Control and continuing until the third anniversary thereof;
provided that, in the event that Executive's employment is terminated by the
--------------
Company in a Termination Without Cause after the occurrence of a Potential
Change of Control and a Change of Control occurs within one year following the
date of such termination, then solely for purposes of this Agreement, Executive
shall be deemed to have remained in the Company's employ until the occurrence of
the Change of Control and thereafter to have then been terminated by the Company
in a Termination Without Cause. As a result, Executive shall be entitled to
receive the excess of (i) the benefits payable in the event of a Termination
Without Cause under this Section 6, over (ii) the amount of any benefits payable
to Executive under Section 5.
(A) EARLY TERMINATION OF THE EMPLOYMENT PERIOD. Notwithstanding Section
--------------------------------------------
1(b) hereof, the Employment Period shall end upon the earliest to occur of
(i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a
Voluntary Termination Within 180 Days, (iv) a Voluntary Termination After
180 Days, (v) a Termination For Good Reason, (vi) a Termination Due to
Retirement, (vii) a Termination Due to Disability, or (viii) a Termination
Due to Death.
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(B) NOTICE OF TERMINATION. Communication of termination under this Section
---------------------
6 shall be made to the other party by Notice of Termination in the case of
(i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a
Voluntary Termination Within 180 Days, (iv) a Voluntary Termination After
180 Days, or (v) a Termination For Good Reason.
(C) BENEFITS PAYABLE UPON TERMINATION; RULES FOR DETERMINING REASON FOR
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TERMINATION.
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(I) BENEFITS PAYABLE UPON TERMINATION. Following the end of the
-----------------------------------
Employment Period, Executive (or, in the event of his death, his
surviving spouse, if any, or if none, his estate) shall be paid
the type or types of compensation determined to be payable in
accordance with the following table, such payment to be made in
the form specified in such table and at the time established
pursuant to Section 7 hereof. Capitalized terms used in such table
(and otherwise in this Section 6) that are defined in Section 5,
and not specifically defined in Section 6(d) hereof, shall have
the meanings ascribed thereto under Section 5. Where such a
capitalized term is defined solely in Section 6(d), or in both
Section 5 and Section 6(d), such term shall have the meaning
ascribed to it in Section 6(d).
(II) RULES FOR DETERMINING REASON FOR TERMINATION.
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(A) No Termination Without Cause, Voluntary Termination
Within 180 Days or Termination For Good Reason shall be
treated as a Termination Due to Retirement or a
Termination Due to Disability for purposes of any Pro
Rata Target Bonus, Severance Payment, Equity Awards or
Vested Benefits Enhancement under this Section 6,
notwithstanding the fact that, either on, before or after
the Date of Termination with respect thereto, (I)
Executive was eligible for Retirement as defined in the
Savings Plan, (II) Executive requested to be treated as a
retiree for purposes of the Savings Plan or any other
plan or program of the Company or its affiliates, or
(III) Executive or the Company could have terminated
Executive's employment in a Termination Due to Disability
hereunder.
(B) No Termination Due to Retirement shall be treated as
a Voluntary Termination After 180 Days for purposes of
this Section 6, notwithstanding the fact that the Date of
Termination for such Termination Due to Retirement may
occur within 180 days following a Change of Control.
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BENEFITS PAYABLE: CHANGE OF CONTROL
BENEFIT Accrued Pro Rata Target Severance Equity Awards
Salary Bonus Payment
======================== ============== ===================== =============== =========================
FORM OF Lump Sum Lump Sum Lump Sum Determined Under the
PAYMENT Applicable Plan
======================== ============== ===================== =============== =========================
Termination For Payable Not Payable Not Payable Determined Under the
Cause Applicable Plan
Termination Payable Payable Payable Determined Under the
Without Cause Applicable Plan
Voluntary Payable Payable Payable Determined Under the
Termination Within Applicable Plan
180 Days
Voluntary Payable Not Payable Not Payable Determined Under the
Termination Applicable Plan
After 180 Days
Termination For Payable Payable Payable Determined Under the
Good Reason Applicable Plan
Termination Due to Payable Determined Under the Not Payable Determined Under the
Retirement Applicable Plan Applicable Plan
Termination Due to Payable Payable Not Payable Determined Under the
Disability Applicable Plan
Termination Due to Payable Payable Not Payable Determined Under the
Death Applicable Plan
------------------------ -------------- --------------------- --------------- -------------------------
BENEFITS PAYABLE: CHANGE OF CONTROL
(Continued)
BENEFIT Vested Benefits Vested Benefits Welfare
Enhancement Benefits Continuation
======================== ========================= ============================= ================================
FORM OF Determined Under the Lump Sum Determined Under the
PAYMENT Applicable Plan Applicable Plan
======================== ========================= ============================= ================================
Termination For Determined Under the Not Payable Not Available
Cause Applicable Plan
Termination Determined Under the Payable Available
Without Cause Applicable Plan
Voluntary Determined Under the Payable Available
Termination Within Applicable Plan
180 Days
Voluntary Determined Under the Not Payable Not Available
Termination Applicable Plan
After 180 Days
Termination For Determined Under the Payable Available
Good Reason Applicable Plan
Termination Due to Determined Under the Not Payable Available
Retirement Applicable Plan
Termination Due to Determined Under the Not Payable Available
Disability Applicable Plan
Termination Due to Determined Under the Not Payable Not Available
Death Applicable Plan
------------------------ ------------------------- ----------------------------- --------------------------------
- 13 -
(D) DEFINITIONS.
-----------
"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 Securities and Exchange Act of 1934, as
amended (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: (i) 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 (A) 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 Exchange Act and
the applicable rules and regulations thereunder, or (B) 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 Exchange Act and the applicable rules and regulations
thereunder, in either case described in clause (A) or (B) above, whether or
not such agreement, arrangement or understanding is also then reportable by
such Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); and (ii) 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.
"CHANGE OF CONTROL" means:
(I) 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 Hartford Life or The Hartford or a subsidiary
of either of the foregoing or any employee benefit plan sponsored
by Hartford Life or The Hartford or a subsidiary of either of the
foregoing, is the Beneficial Owner of the greater of (A) the
percentage of the outstanding stock of Hartford Life owned at such
time by The Hartford, or (B) twenty percent or more of the
outstanding stock of the Hartford Life;
(II) any person (within the meaning of Section 13(d) of the Act),
other than Hartford Life or The Hartford or a subsidiary of either
of the foregoing or any employee benefit plan sponsored by
Hartford Life or The Hartford or a subsidiary of either of the
foregoing, shall purchase shares pursuant to a tender offer or
exchange offer to acquire any stock of the Hartford Life (or
securities convertible into stock) for cash, securities or any
other
- 14 -
consideration, provided that after consummation of the offer, the
person in question is the Beneficial Owner, directly or
indirectly, of the greater of (A) the percentage of the
outstanding stock of the Hartford Life owned at such time by The
Hartford, or (B) fifteen percent or more of the outstanding stock
of Hartford Life (calculated as provided in paragraph (d) of Rule
13d-3 under the Act in the case of rights to acquire stock);
(III) the stockholders of Hartford Life shall approve (A) any
consolidation or merger of Hartford Life in which Hartford Life is
not the continuing or surviving corporation or pursuant to which
shares of stock of Hartford Life would be converted into cash,
securities or other property, other than a merger of Hartford Life
in which holders of stock of Hartford Life immediately prior to
the merger have the same proportionate ownership of common stock
of the surviving corporation immediately after the merger as
immediately before, or (B) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions)
of all or substantially all the assets of Hartford Life; or
(IV) within any 12 month period, the persons who were directors of
Hartford Life 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 of Hartford
Life or the board of directors of any successor to Hartford Life,
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 (A) was elected to the Board of Hartford Life 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 (iv), and (B) was
not designated by a person who has entered into an agreement with
Hartford Life to effect a transaction described in the immediately
preceding clause (iii); or
(V) a Change of Control as defined in any of the foregoing clauses
(i), (ii), (iii) or (iv) occurs with respect to The Hartford at a
time when The Hartford directly or indirectly owns more than 50%
of the combined voting power and the value of the capital stock of
Hartford Life, provided that a sale of all of the interest of The
-------------
Hartford in Hartford Life shall not be considered a Change of
Control hereunder.
"DATE OF TERMINATION" means (i) in the case of a termination of the
Employment Period for which a Notice of Termination is required, the date
of receipt of such Notice of Termination or, if later, the date specified
therein, as the case may be, or (ii) in all other cases, the actual date on
which Executive's employment terminates during the Employment Period.
- 15 -
"NOT PAYABLE" means that a particular benefit shall not be paid or
otherwise provided to Executive.
"NOTICE OF TERMINATION" means (i) in the case of a Termination For Cause, a
written notice given by the Company to Executive, within 30 calendar days
of the Company's having actual knowledge of the events giving rise to such
termination, (ii) in the case of a Termination Without Cause, a written
notice given by the Company to Executive at least 30 calendar days before
the effective date of such Termination Without Cause, (iii) in the case of
a Voluntary Termination Within 180 Days or a Voluntary Termination After
180 Days, a written notice given by Executive to the Company at least 30
calendar days before the effective date of such termination, and (iv) in
the case of a Termination For Good Reason, a written notice given by
Executive to the Company within 180 days of Executive's having actual
knowledge of the events giving rise to such Termination For Good Reason,
and which (A) indicates the specific termination provision in this
Agreement relied upon, (B) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated, and (C) if the termination
date is other than the date of receipt of such notice, specifies the
termination date of this Agreement (which date shall be not more than 15
days after the giving of such notice). The failure by Executive to set
forth in such Notice of Termination any fact or circumstance that
contributes to a showing of Good Reason shall not waive any right of
Executive hereunder or preclude Executive from asserting such fact or
circumstance in enforcing his rights hereunder.
"PAYABLE" means that a particular benefit shall be paid to Executive in the
amount, at the time, and in the form specified herein.
"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 Company, any subsidiary of the
Company or any other Person controlled by the Company, (ii) any trustee or
other fiduciary holding securities under any employee benefit plan of the
Company or of any subsidiary of the Company, or (iii) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially
the same proportions as their ownership of securities of the Company.
- 16 -
"POTENTIAL CHANGE OF CONTROL" means:
(I) a Person shall commence a tender offer, which if successfully
consummated, would result in such Person being the Beneficial
Owner of the greater of: (A) the percentage of outstanding stock
of Hartford Life owned by The Hartford at the time of such
commencement, or (B) 15% or more of the voting securities of
Hartford Life;
(II) Hartford Life shall enter into an agreement the consummation
of which shall constitute a Change of Control;
(III) proxies for the election of directors of Hartford Life shall
be solicited by anyone other than Hartford Life;
(IV) a Potential Change of Control as defined in any of the
foregoing clauses (i), (ii) or (iii) occurs with respect to The
Hartford at a time when The Hartford owns more than 50% of the
combined voting power and the value of the capital stock of
Hartford Life; or
(V) any other event shall occur which is deemed to be a Potential
Change of Control by the relevant Board or the appropriate
Committee thereof.
"SEVERANCE PAYMENT" means a cash amount equal to three times the sum of (i)
Executive's Base Salary at the rate in effect as of the Date of
Termination, and (ii) Executive's Target Bonus for such year.
"TERMINATION FOR CAUSE" means the Company's termination of Executive's
employment due to (i) Executive's conviction of a felony; (ii) an act or
acts of extreme dishonesty or gross misconduct on Executive's part which
result or are intended to result in material damage to the Company's
business or reputation; or (iii) repeated material violations by Executive
of his obligations under Section 2 of this Agreement, which violations are
demonstrably willful and deliberate on Executive's part and which result in
material damage to the Company's business or reputation.
- 17 -
"TERMINATION FOR GOOD REASON" means the occurrence of any of the following
after the occurrence of a Potential Change of Control or a Change of
Control:
(I) (A) the assignment to Executive of any duties inconsistent in
any material adverse respect with Executive's position, duties,
authority or responsibilities as contemplated by Section 2 of
this Agreement, or (B) any other material adverse change in such
position, including titles, authority or responsibilities;
(II) any failure by the Company to comply with any of the
provisions of Sections 3 and 4 of this Agreement at a level of
least equal to that in effect immediately preceding the Change of
Control or a Potential Change of Control, other than an
insubstantial or inadvertent failure remedied by the Company
promptly after receipt of notice thereof given by Executive;
(III) the Company's requiring Executive to be based at any office
or location more than 25 miles from the location at which he
performed his services specified under Section 2 hereof
immediately prior to the Change of Control or a Potential Change
of Control, except for travel reasonably required in the
performance of Executive's responsibilities;
(IV) any failure by the Company to obtain the assumption and
agreement to perform this Agreement by a successor as contemplated
by Section 10(d) hereof; or
(V) any attempt by the Company to terminate the Executive's
employment in a Termination For Cause that is determined in a
proceeding pursuant to Section 9 or Section 10 hereof not to
constitute a Termination For Cause.
Notwithstanding the foregoing, a termination of Executive's employment
shall not be treated as a Termination For Good Reason (I) if Executive
shall have consented in writing to the occurrence of the event giving rise
to the claim of Termination For Good Reason, or (II) if Executive shall
have delivered a Notice of Termination to the Company, and the facts and
circumstances specified therein as providing a basis for such Termination
For Good Reason are cured by the Company within 10 days of its receipt of
such Notice of Termination.
"VESTED BENEFITS ENHANCEMENT" means (i) a cash amount equal to the present
value, calculated using a discount rate equal to the then prevailing
applicable Federal rate as determined under Section 1274(d) of the Internal
Revenue Code of 1986, as amended (the "Code"), of the additional retirement
benefits that would have been payable or available to Executive under any
ERPs, based on (A) the age
- 18 -
and service Executive would have attained or completed had Executive
continued in the Company's employ until the third anniversary of the
occurrence of the Change of Control, and (B) where compensation is a
relevant factor, his pensionable compensation as of the Date of
Termination, such compensation to include, on the same terms as apply to
other executives, any Severance Payment made to Executive, and (ii) solely
for purposes of vesting in any benefits under any ESPs, Executive shall be
treated as having continued in the Company's employ until the third
anniversary of the occurrence of such Change of Control.
"VOLUNTARY TERMINATION WITHIN 180 DAYS" means a termination of employment
by Executive for any reason within the first 180 days following a Change of
Control, and "VOLUNTARY TERMINATION AFTER 180 DAYS" means a termination of
employment by Executive other than a Termination For Good Reason, a
Termination Due to Disability by Executive, or a Termination Due to Death
within the remaining 2 years and 6 months following a Change of Control.
"WELFARE BENEFITS CONTINUATION" shall have the same meaning as that
described in Section 5 hereof, except that the entitlement of Executive
and/or his dependents to participation in the Welfare Benefit Plans shall
continue until the third anniversary of the Date of Termination.
(D) OUT-PLACEMENT SERVICES. If the Employment Period terminates because of a
-----------------------
Termination Without Cause or a Termination For Good Reason, Executive shall be
entitled to out-placement services, provided by the Company or its designee at
the Company's expense, for 12 months following the Date of Termination, or such
lesser period as the Executive may require such services.
(E) CERTAIN FURTHER PAYMENTS BY COMPANY.
-----------------------------------
(I) TAX REIMBURSEMENT PAYMENT. In the event that any amount or benefit paid
-------------------------
or distributed to Executive pursuant to this Agreement, taken together with
any amounts or benefits otherwise paid or distributed to Executive by the
Company or any affiliate (collectively, the "Covered Payments"), are or
become subject to the tax (the "Excise Tax") imposed under Section 4999 of
the Internal Revenue Code of 1986, as amended, or any similar tax that may
hereafter be imposed, the Company shall pay to the Executive at the time
specified in this Section an additional amount (the "Tax Reimbursement
Payment") such that the net amount retained by the Executive with respect
to such Covered Payments, after deduction of any Excise Tax on the Covered
Payments and any Federal, state and local income tax and other tax on the
Tax Reimbursement Payment provided for by this Section, but before
deduction for any Federal, state or local income or employment
- 19 -
tax withholding on such Covered Payments, shall be equal to the amount of
the Covered Payments.
(II) APPLICABLE RULES. For purposes of determining whether any of the
-----------------
Covered Payments will be subject to the Excise Tax and the amount of such
Excise Tax,
(A) such Covered Payments will be treated as "parachute payments"
within the meaning of Section 280G of the Code, and all "parachute
payments" in excess of the "base amount" (as defined under Section
280G(b)(3) of the Code) shall be treated as subject to the Excise
Tax, unless, and except to the extent that, in the good faith
judgment of the Company's independent certified public
accountants appointed prior to the Effective Date or tax counsel
selected by such accountants (the "Accountants"), the Company has
a reasonable basis to conclude that such Covered Payments (in
whole or in part) either do not constitute "parachute payments" or
represent reasonable compensation for personal services actually
rendered (within the meaning of Section 280G(b)(4)(B) of the Code)
in excess of the "base amount," or such "parachute payments" are
otherwise not subject to such Excise Tax, and
(B) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with
the principles of Section 280G of the Code.
(III) ADDITIONAL RULES. For purposes of determining the amount of the Tax
-----------------
Reimbursement Payment, the Executive shall be deemed to pay: (A) Federal
income taxes at the highest applicable marginal rate of Federal income
taxation for the calendar year in which the Tax Reimbursement Payment is to
be made, and (B) any applicable state and local income and other taxes at
the highest applicable marginal rate of taxation for the calendar year in
which the Tax Reimbursement Payment is to be made, net of the maximum
reduction in Federal incomes taxes which could be obtained from the
deduction of such state or local taxes if paid in such year.
(IV) REPAYMENT OR ADDITIONAL PAYMENT IN CERTAIN CIRCUMSTANCES.
--------------------------------------------------------
(A) REPAYMENT. In the event that the Excise Tax is subsequently
---------
determined by the Accountants or pursuant to any proceeding or
negotiations with the Internal Revenue Service to be less than the
amount taken into account hereunder in calculating the Tax
Reimbursement Payment made, Executive shall repay to the Company,
at the time that the amount of such reduction in the Excise Tax is
finally determined, the portion of such prior Tax Reimbursement
Payment that would not have been paid if such
- 20 -
lesser Excise Tax had been applied in initially calculating such
Tax Reimbursement Payment, plus interest on the amount of such
repayment at the rate provided in Section 1274(b)(2)(B) of the
Code. Notwithstanding the foregoing, in the event any portion of
the Tax Reimbursement Payment to be repaid to the Company has been
paid to any Federal, state or local tax authority, repayment
thereof shall not be required until actual refund or credit of
such portion has been made to Executive by the applicable tax
authority, and interest payable to the Company shall not exceed
interest received or credited to the Executive by such tax
authority for the period it held such portion. Executive and the
Company shall mutually agree upon the course of action to be
pursued (and the method of allocating the expenses thereof) if
Executive's good faith claim for refund or credit is denied.
(B) ADDITIONAL TAX REIMBURSEMENT PAYMENT. In the event that the
--------------------------------------
Excise Tax is later determined by the Accountants or pursuant to
any proceeding or negotiations with the Internal Revenue Service
to exceed the amount taken into account hereunder at the time the
Tax Reimbursement Payment is made (including, but not limited to,
by reason of any payment the existence or amount of which cannot
be determined at the time of the Tax Reimbursement Payment), the
Company shall make an additional Tax Reimbursement Payment in
respect of such excess (plus any interest or penalty payable with
respect to such excess) at the time that the amount of such excess
is finally determined.
(V) TIMING FOR TAX REIMBURSEMENT PAYMENT. The Tax Reimbursement Payment (or
------------------------------------
portion thereof) provided for in this Section 6 shall be paid to Executive
not later than 10 business days following the payment of the Covered
Payments; provided, however, that if the amount of such Tax Reimbursement
Payment (or portion thereof) cannot be finally determined on or before the
date on which payment is due, the Company shall pay to Executive by such
date an amount estimated in good faith by the Accountants to be the minimum
amount of such Tax Reimbursement Payment and shall pay the remainder of
such Tax Reimbursement Payment (together with interest at the rate provided
in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined, but in no event later than 45 calendar days after payment of
the related Covered Payment. In the event that the amount of the estimated
Tax Reimbursement Payment exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to
Executive, payable on the fifth business day after written demand by the
Company for payment (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code).
- 21 -
7. TIMING OF PAYMENTS.
------------------
Accrued Salary, Severance Payments and Vested Benefits Enhancements shall be
paid no later than 10 days following the termination of the Employment Period.
Pro-Rata Target Bonus shall be paid no later than the same time as similar
awards are paid to other executives participating in the plans or programs under
which the awards are paid. Vested Benefits and Equity Awards shall be paid no
later than the time for payment Determined Under the Applicable Plan except as
otherwise expressly superseded or modified by this Agreement. Tax Reimbursement
Payments shall be paid at the time specified in Section 6 hereof.
Notwithstanding the foregoing, solely for purposes of amounts payable pursuant
to Section 5 hereof, if any amount payable to Executive pursuant to Section 5
would be nondeductible by the Company under Section 162(m) of the Code if paid
in the year of Executive's termination, the Company shall have the option of
paying such nondeductible amount, with interest at the one-year treasury ▇▇▇▇
rate as in effect on the date of such termination as reported in the Wall Street
Journal, on the first day of the second calendar quarter in the year following
such termination.
8. FULL DISCHARGE OF COMPANY OBLIGATIONS.
-------------------------------------
Except as expressly provided in the last sentence of this Section 8, the amounts
payable to Executive pursuant to either Section 5 or Section 6 following
termination of his employment (including amounts payable with respect to Vested
Benefits) shall be in full and complete satisfaction of Executive's rights under
this Agreement and any other claims he may have in respect of his employment by
the Company or any of its affiliates. Such amounts shall constitute liquidated
damages with respect to any and all such rights and claims and, upon Executive's
receipt of such amounts, the Company shall be released and discharged from any
and all liability to Executive in connection with this Agreement or otherwise in
connection with Executive's employment with the Company and its affiliates.
Nothing in this Section 8 shall be construed to release the Company from its
obligation to indemnify Executive as provided in Section 4(e) hereof.
9. NONCOMPETITION, CONFIDENTIALITY AND OTHER COVENANTS.
---------------------------------------------------
By and in consideration of the compensation and benefits to be provided by the
Company hereunder, including the severance arrangements set forth herein,
Executive agrees to the following:
(A) NONCOMPETITION. During the Employment Period and during the one year
--------------
period (the "Restriction Period") following any Voluntary Termination of
the Employment Period by Executive pursuant to Section 5 hereof, Executive
shall not
- 22 -
become associated with any entity, whether as a principal, partner,
employee, agent, consultant, shareholder (other than as a holder, or a
member of a group which is a holder, of not in excess of 1% of the
outstanding voting shares of any publicly traded company) or in any other
relationship or capacity, paid or unpaid, that is actively engaged in any
geographic area in any business which is in competition with the business
of the Company.
(B) CONFIDENTIALITY. Without the prior written consent of the Company,
---------------
except to the extent required by an order of a court having competent
jurisdiction or under subpoena from an appropriate government agency,
Executive shall not disclose to any third person, or permit the use of for
the benefit of any person or any entity other than The Company or its
affiliates, any trade secrets, customer lists, information regarding
product development, marketing plans, sales plans, management organization
information (including data and other information relating to members of
the Board and management), operating policies or manuals, business plans,
financial records, or other financial, organizational, commercial,
business, sales, marketing, technical, product or employee information
relating to the Company or its affiliates or information designated as
confidential, proprietary, and/or a trade secret, or any other information
relating to the Company or its affiliates that Executive knows from the
circumstances, in good faith and good conscience, should be treated as
confidential, or any information that the Company or its affiliates may
receive belonging to customers, agents or others who do business with the
Company or its affiliates, except to the extent that any such information
previously has been disclosed to the public by the Company or is in the
public domain (other than by reason of Executive's violation of this
Section 9(b)).
(C) NON-SOLICITATION OF EMPLOYEES. During the Employment Period and the two
-----------------------------
year period following any termination of the Employment Period pursuant to
Section 5 hereof, Executive shall not directly or indirectly solicit,
encourage or induce any employee of the Company or its affiliates to
terminate employment with such entity, and shall not directly or
indirectly, either individually or as owner, agent, employee, consultant or
otherwise, employ or offer employment to any person who is or was employed
by the Company or an affiliate thereof unless such person shall have ceased
to be employed by such entity for a period of at least six months.
(D) COMPANY PROPERTY. Except as expressly provided herein, promptly
-----------------
following any termination of the Employment Period, Executive shall return
to the Company all property of the Company, and all copies thereof in
Executive's possession or under his control.
- 23 -
(E) INJUNCTIVE RELIEF AND OTHER REMEDIES WITH RESPECT TO COVENANTS.
---------------------------------------------------------------------
Executive acknowledges and agrees that the covenants and obligations of
Executive with respect to noncompetition, confidentiality, nonsolicitation,
and Company property relate to special, unique and extraordinary matters
and that a violation of any of the terms of such covenants and obligations
will cause the Company irreparable injury for which adequate remedies are
not available at law. Therefore, Executive agrees that the Company (i)
shall be entitled to an injunction, restraining order or such other
equitable relief (without the requirement to post bond) restraining
Executive from committing any violation of the covenants and obligations
contained in this Section 9, and (ii) shall have no further obligation to
make any payments to Executive hereunder following any material violation
of the covenants and obligations contained in this Section 9. These
remedies are cumulative and are in addition to any other rights and
remedies the Company may have at law or in equity. In connection with the
foregoing provisions of this Section 9, Executive represents that his
economic means and circumstances are such that such provisions will not
prevent him from providing for himself and his family on a basis
satisfactory to him. Notwithstanding the foregoing, in no event shall an
asserted violation of the provisions of this Section constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive
under this Agreement following a Change of Control.
10. MISCELLANEOUS.
-------------
(A) SURVIVAL. All of the provisions of Sections 5 (relating to termination
--------
of the Employment Period prior to a Change of Control), 6 (relating to
termination of the Employment Period following a Change of Control or a
Potential Change of Control), 9 (relating to noncompetition,
confidentiality, nonsolicitation and Company property), 10(b) (relating to
arbitration), 10(c) (relating to legal fees) and 10(n) (relating to
governing law) of this Agreement shall survive the termination of this
Agreement.
(B) ARBITRATION. Except as provided in Section 9, any dispute or
-----------
controversy arising under or in connection with this Agreement shall be
resolved by binding arbitration. Such arbitration shall be held in the city
of Hartford, Connecticut and except to the extent inconsistent with this
Agreement, shall be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association in effect at the time of the
arbitration, and otherwise in accordance with the principles that would be
applied by a court of law or equity. The arbitrator shall be acceptable to
both the Company and Executive. If the parties cannot agree on an
acceptable arbitrator, the dispute or controversey shall be heard by a
panel of three arbitrators; one appointed by each of the parties and the
third appointed by the other two arbitrators. The Company and Executive
further agree
- 24 -
that they will abide by and perform any award or awards rendered by the
arbitrators and that a judgment may be entered on any award or awards
rendered by any state or federal court having jurisdiction over the Company
or Executive or any of their respective property.
(C) LEGAL FEES AND EXPENSES. In any contest (whether initiated by Executive
-----------------------
or by the Company) as to the validity, enforceability or interpretation of
any provision of this Agreement, the Company shall pay Executive's legal
expenses (or cause such expenses to be paid) including, without limitation,
his reasonable attorney's fees, on a quarterly basis, upon presentation of
proof of such expenses in a form acceptable to the Company, provided that
-------------
Executive shall reimburse the Company for such amounts, plus simple
interest thereon at the 90-day United States Treasury ▇▇▇▇ rate as in
effect from time to time, compounded annually, if Executive shall not
prevail, in whole or in part, as to any material issue as to the validity,
enforceability or interpretation of any provision of this Agreement.
(D) SUCCESSORS; BINDING EFFECT. This Agreement shall inure to the benefit
---------------------------
of and be binding upon the Company and its successors. The Company shall
require any successor to all or substantially all of the business and/or
assets of the Company, whether direct or indirect, by purchase, merger,
consolidation, acquisition of stock, or otherwise, by an agreement in form
and substance satisfactory to Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent as the
Company would be required to perform the Agreement if no such succession
had taken place. This Agreement is personal to the Executive and, without
the prior written consent of the Company, shall not be assignable by
Executive otherwise than by will or the law of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by
Executive's legal representatives.
(E) ASSIGNMENT. Except as provided in Section 10(d), neither this Agreement
----------
nor any of the rights or obligations hereunder shall be assigned or
delegated by any party hereto without the prior written consent of the
other party.
(F) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
-----------------
between the parties hereto with respect to the matters referred to herein.
This Agreement supersedes and replaces any prior employment or severance
agreement or arrangement between the Company and Executive. No other
agreement relating to the terms of Executive's employment by the Company,
oral or otherwise, shall be binding between the parties unless it is in
writing and signed by the party against whom enforcement is sought. There
are no promises, representations, inducements or statements between the
parties other than those that are expressly contained
- 25 -
herein. Executive acknowledges that he is entering into this Agreement of
his own free will and accord, and with no duress, and that he has read this
Agreement and that he understands it and its legal consequences.
(G) SEVERABILITY; REFORMATION. In the event that one or more of the
--------------------------
provisions of this Agreement shall become invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby. In the event of
a determination that any of the provisions of Section 9(a), Section 9(b) or
Section 9(c) are not enforceable in accordance with their terms, Executive
and the Company agree that such Section shall be reformed to make such
Section enforceable in a manner that provides the Company the maximum
rights permitted at law.
(H) WAIVER. Waiver by any party hereto of any breach or default by the
------
other party of any of the terms of this Agreement shall not operate as a
waiver of any other breach or default, whether similar to or different from
the breach or default waived. No waiver of any provision of this Agreement
shall be implied from any course of dealing between the parties hereto or
from any failure by either party hereto to assert its or his rights
hereunder on any occasion or series of occasions.
(I) NOTICES. Any notice required or desired to be delivered under this
-------
Agreement shall be in writing and shall be delivered personally, by courier
service, by registered mail, return receipt requested, or by telecopy and
shall be effective upon actual receipt by the party to which such notice
shall be directed, and shall be addressed as follows (or to such other
address as the party entitled to notice shall hereafter designate in
accordance with the terms hereof):
- 26 -
If to the Company: The Hartford Financial Services Group, Inc.
Law Department, ▇▇-▇-▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
And: Hartford Life, Inc.
Law Department
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
With a copy to: Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to Executive: The home address of Executive
shown on the records of the Company
(J) AMENDMENTS. This Agreement may not be altered, modified or amended
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except by a written instrument signed by each of the parties hereto.
(K) HEADINGS. Headings to provisions of this Agreement are for the
--------
convenience of the parties only and are not intended to be part of or to
affect the meaning or interpretation hereof.
(L) COUNTERPARTS. This Agreement may be executed in counterparts, each of
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which shall be deemed an original but all of which together shall
constitute one and the same instrument.
(M) WITHHOLDING. Any payments provided for herein shall be reduced by any
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amounts required to be withheld by the Company from time to time under
applicable Federal, State or local income or employment tax laws or similar
statutes or other provisions of law then in effect.
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(N) GOVERNING LAW. This Agreement shall be governed by the laws of the
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State of Connecticut, without reference to principles of conflicts or
choice of law under which the law of any other jurisdiction would apply.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and Executive has hereunto set his
hand, as of the day and year first above written.
THE HARTFORD FINANCIAL SERVICES
GROUP, INC.
WITNESSED:
/s/ ▇▇▇▇▇▇ ▇▇▇▇
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By: ▇▇▇▇▇▇ ▇▇▇▇
Title: Chairman
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HARTFORD LIFE, INC.
WITNESSED:
/s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇
Title: Chairman
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EXECUTIVE:
WITNESSED:
/s/ Lowndes ▇. ▇▇▇▇▇
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Lowndes ▇. ▇▇▇▇▇
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