THE HARTFORD FINANCIAL SERVICES GROUP, INC.
________________________________________________________________________________
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
2000 PLANCO NON-EMPLOYEE OPTION PLAN
450,000 SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE
________________________________________________________________________________
FEBRUARY, 2003
Optplanplancofeb2003!.doc
TABLE OF CONTENTS
General Information ...........................................................2
The Hartford Financial Services Group, Inc.
2000 PLANCO Non-Employee Option Plan ..........................................3
GENERAL INFORMATION
Pursuant to The Hartford Financial Services Group, Inc. 2000 PLANCO
Non-Employee Option Plan (the "Plan"), the committee administering the Plan may
award non-qualified stock options. Reference is made to the text of the Plan
herein for a complete description of awards permitted under the Plan and the
relevant provisions and conditions applicable thereto.
This prospectus does not cover resales of Common Stock acquired
pursuant to the provisions of the Plan. Resales may be subject to restrictions
or limitations imposed by the Securities Act of 1933 and the Securities Exchange
Act of 1934.
The Plan is not subject to any of the provisions of the Employee
Retirement Income Security Act of 1974. Furthermore, Section 401 of the Internal
Revenue Code relating to certain qualified pension, profit-sharing and stock
bonus plans does not apply to the Plan.
Plan participants receive information with respect to their
participation, including the date of grant, the exercise price, the amount
exercisable and the expiration date.
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
2000 PLANCO NON-EMPLOYEE OPTION PLAN
1. PURPOSE
The purpose of The Hartford Financial Services Group, Inc. 2000
Non-Employee Option Plan is to motivate and reward superior performance on the
part of Key Individuals who render services on behalf of The Hartford and its
affiliates and to thereby attract and maintain relationships with Key
Individuals of superior ability. In addition, the Plan is intended to further
opportunities for stock ownership by such Key Individuals in order to increase
their proprietary interest in the Company and, as a result, their interest in
the success of the Company. Awards may be made, in the discretion of the
Committee, to Key Individuals whose responsibilities and decisions directly
affect the performance of any Participating Company and its subsidiaries.
2. DEFINITIONS
When used herein, the following terms shall have the following
meanings:
"ACT" means the Securities Exchange Act of 1934, as amended.
"OPTION AGREEMENT" means the written agreement evidencing each Option
granted under the Plan.
"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: (i) a Person shall not be deemed the
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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 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 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 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.
"BENEFICIARY" means the beneficiary or beneficiaries designated
pursuant to Section 10 to receive the amount, if any, payable under the Plan
upon the death of an Option recipient.
"BOARD" means the Board of Directors of the Company.
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"CHANGE OF CONTROL" means the occurrence of an event defined in Section
9 of the Plan.
"CODE" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended. (All citations to sections of the Code are to such sections
as they may from time to time be amended or renumbered.)
"COMMITTEE" means the Compensation and Personnel Committee of the Board
or such member thereof or such other committee as may be designated by the Board
to administer the Plan.
"COMPANY" means The Hartford Financial Services Group, Inc. and its
successors and assigns.
"EMPLOYEE" means any person regularly employed by a Participating
Company, but shall not include any person who performs services for a
Participating Company as an independent contractor or under any other
non-employee classification, or who is classified by a Participating Company as,
or determined by a Participating Company to be, an independent contractor.
"FAIR MARKET VALUE," unless otherwise indicated in the provisions of
this Plan, means, as of any date, the composite closing price for one share of
Stock on the New York Stock Exchange or, if no sales of Stock have taken place
on such date, the composite closing price on the most recent date on which
selling prices were quoted, the determination to be made in the discretion of
the Committee.
"KEY INDIVIDUAL" means an individual who is an independent contractor
serving on the wholesale sales force in a Required Relationship with a
Participating Company who is not an Employee of any Participating Company and
whose responsibilities and decisions, in the judgment of the Committee, directly
affect the performance of the Company and its affiliates.
"OPTION" means a non-qualified Stock option awarded under Section 5 of
the Plan to purchase Stock of the Company.
"PARTICIPATING COMPANY" means the Company or any subsidiary or other
affiliate of the Company.
"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.
"PLAN" means the The Hartford Financial Services Group, Inc. 2000
PLANCO Non-Employee Option Plan, as the same may be amended, administered or
interpreted from time to time.
"PLAN YEAR" means the calendar year.
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"REQUIRED RELATIONSHIP" means a relationship involving an insurance
agent who is an exclusive agent of a Participating Company, or who derives more
than 50% of his or her annual income from a Participating Company.
"STOCK" means the Common Stock ($.01 par value) of the Company.
"THE HARTFORD" means The Hartford Financial Services Group, Inc. and
its successors and assigns.
3. SHARES SUBJECT TO THE PLAN
The aggregate number of shares of Stock which may be awarded under the
Plan shall not exceed 450,000 shares of Stock, subject to adjustment as provided
in Section 13.
Subject to the above limitations, shares of Stock to be issued under
the Plan may be made available from the authorized but unissued shares, or
shares held by the Company in treasury or shares purchased in the open market.
For the purpose of computing the total number of shares of Stock
available for Options under the Plan and in applying the limitation in the
preceding paragraph, there shall be counted against the foregoing limitations
the number of shares of Stock subject to issuance upon exercise or settlement of
Options determined as at the dates on which such Options are granted. If any
Options under the Plan are forfeited, terminated, expire unexercised, are
settled in cash in lieu of Stock or are exchanged for other Options, the shares
of Stock which were theretofore subject to such Options shall again be available
for awards under the Plan to the extent of such forfeiture, termination,
expiration, cash settlement or exchange of such Options. Further, any shares
that are exchanged (either actually or constructively) by optionees as full or
partial payment to the Company of the purchase price of shares being acquired
through the exercise of a Stock option granted under the Plan may be available
for subsequent awards.
4. GRANT OF OPTIONS AND OPTION AGREEMENTS
(a) Subject to the provisions of the Plan, the Committee shall (i)
determine and designate from time to time those Key Individuals or groups of Key
Individuals to whom Options are to be granted; (ii) determine the amount or
number of shares of Stock subject to each Option; (iii) determine the time or
times when and the manner in which each Option shall be exercisable and the
duration of the exercise period; and (iv) determine the terms and conditions of
each Option.
(b) Each Option granted under the Plan shall be evidenced by an Option
Agreement. Such Option Agreement shall be subject to and incorporate the express
terms and conditions, if any, required under the Plan or required by the
Committee.
5. STOCK OPTIONS
(a) The exercise period for a non-qualified Stock option shall not
exceed ten years from the date of grant.
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(b) Unless otherwise determined by the Committee in its discretion, the
Option price per share shall be not less than the Fair Market Value of one share
of Stock on the date the Option is granted.
(d) No part of any Option may be exercised until the Key Individual who
has been granted the Option shall have remained in a Required Relationship with
a Participating Company for such period after the date of grant as the Committee
may specify, if any, and the Committee may further require exercisability in
installments.
(e) Except as provided in Section 9, the purchase price of the shares
as to which an Option shall be exercised shall be paid to the Company at the
time of exercise either in cash or Stock already owned by the optionee having a
total Fair Market Value equal to the purchase price, or a combination of cash
and Stock having a total fair market value, as so determined, equal to the
purchase price. The Committee shall determine acceptable methods for tendering
Stock as payment upon exercise of an Option and may impose such limitations and
prohibitions on the use of Stock to exercise an Option as it deems appropriate.
(f) In case of a termination of a Key Individual's Required
Relationship, the following provisions shall apply:
(A) If a Key Individual who has been granted an Option shall
die before such Option has expired, his or her Option may be exercised, to the
extent that the Key Individual could have exercised such Option on the date of
his or her death, by (i) the person or persons to whom the Key Individual's
rights under the Option pass by will, or if no such person has such right, by
his or her executors or administrators; or (ii) his or her Beneficiary
designated pursuant to Section 10, at any time, or from time to time, in either
case, within three (3) months after the date of the Key Individual's death, but
not later than the expiration date of the Option specified in Section 5(b)
above.
(B) Except as provided in Section 9, if the Key Individual's
Required Relationship is terminated for cause as determined by the Committee,
all Options shall be canceled coincident with the effective date of the
termination of the Required Relationship.
(C) Except as provided in Section 9, if the Key Individual's
Required Relationship terminates for any reason other than death or cause, he or
she may exercise his or her Options, to the extent exercisable at the date of
the termination of his or her Required Relationship, at any time, or from time
to time, within three (3) months after the date of the termination of his or her
Required Relationship, but not later than the expiration date specified in
Section 5(b) above. Any Options not so exercisable shall be cancelled coincident
with the effective date of the termination of the Required Relationship.
(g) No Option granted under the Plan shall be transferable other than
by will or by the laws of descent and distribution. During the lifetime of the
optionee, an Option shall be exercisable only by the Key Individual to whom the
Option is granted (or his or her estate or designated Beneficiary).
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8. CERTIFICATES FOR SHARES OF STOCK
(a) The Company shall not be required to issue or deliver any
certificates for shares of Stock prior to (i) the listing of such shares on any
stock exchange on which the Stock may then be listed and (ii) the completion of
any registration or qualification of such shares under any federal or state law,
or any ruling or regulation of any government body which the Company shall, in
its sole discretion, determine to be necessary or advisable.
(b) All certificates for shares of Stock delivered under the Plan shall
also be subject to such stop-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Stock is then listed and any applicable federal or state securities
laws, and the Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions. In making such
determination, the Committee may rely upon an opinion of counsel for the
Company.
(c) Each Key Individual who receives Stock in settlement of an Option
shall have all of the rights of a shareholder with respect to such shares,
including the right to vote the shares and receive dividends and other
distributions. No Key Individual awarded an Option shall have any right as a
shareholder with respect to any shares covered by his or her Individual Option
prior to the date of issuance to him or her of a certificate or certificates for
such shares.
9. CHANGE OF CONTROL
(a) For purposes of this Plan, a Change of Control shall occur if:
(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,
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 twenty percent or more of the
outstanding stock of the Company entitled to vote in
the election of directors of the Company;
(ii) any Person, 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
Company (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 Company entitled to vote in
the election of directors of the Company (calculated
as provided in paragraph (d) of Rule 13d-3 under the
Act in the case of rights to acquire stock);
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(iii) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company in which the
Company is not the continuing or surviving
corporation or pursuant to which shares of stock of
the Company entitled to vote in the election of
directors of the Company would be converted into
cash, securities or other property, other than a
consolidation or merger of the Company in which
holders of such stock of the Company immediately
prior to the consolidation or merger have the same
proportionate ownership of common stock of the
surviving corporation entitled to vote in the
election of directors immediately after the
consolidation or 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 the Company;
or
(iv) within any 12 month period, the persons who were
directors of the Company 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 the
Company or the board of directors of any successor to
the Company, 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 the Company 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 the Company to effect a transaction
described in the immediately preceding clause (iii).
(b) Notwithstanding any provisions in this Plan to the contrary, upon
the occurrence of a Change of Control:
(i) Each Option outstanding on the date such Change of
Control occurs, and which is not then fully vested
and exercisable, shall immediately vest and become
exercisable to the full extent of the original grant
for the remainder of its term.
(ii) The surviving or resulting corporation may, in its
discretion, provide for the assumption or replacement
of each outstanding Option granted under the Plan on
terms which are no less favorable to the optionee
than those applicable to the Options immediately
prior to the Change of Control. If the surviving or
resulting corporation offers to assume or replace the
Options, the optionee may elect to have his or her
Options assumed or replaced, in whole or in part, or
to surrender on the date the Change of Control occurs
his or her Options, in whole or in part, for cash
equal to the excess of the Formula Price as defined
in Section 9(b)(v) hereof over the exercise price.
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(iii) In the event the successor corporation does not offer
to assume or replace the outstanding Options as
described in Section 9(b)(ii) hereof, each Option
will be exercised on the date such Change of Control
occurs for cash equal to the excess of the Formula
Price as defined in Section 9(b)(v) hereof over the
exercise price.
(iv) If a Key Individual elects to have his or her Options
assumed or replaced in accordance with clause (ii)
above, and within the three (3) year period following
the date of the Change of Control the following
occurs: the Required Relationship of such Key
Individual is involuntarily terminated other than in
a Termination For Just Cause (as defined below), then
such Key Individual's assumed or replaced Options
shall remain exercisable in whole or in part for
seven (7) months after the date of such termination
(or until the expiration date for such Options, if
earlier). Such assumed or replaced Options may be
exercised for cash equal to the higher of (1) the
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excess of the Fair Market Value of the successor
corporation's common stock on the date of such
termination over the exercise price for such Options,
or (2) the excess of the Formula Price (as defined
below) of the Company's Stock on the date the Change
of Control occurred over the exercise price for such
Options.
(v) The following definitions shall apply for purposes of
this Section 9 only:
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"FORMULA PRICE" means the highest of (A) the highest
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composite daily closing price of the Stock during the
period beginning on the 60th calendar day prior to
the Change of Control and ending on the date of such
Change of Control, (B) the highest gross price paid
for the Stock during the same period of time, as
reported in a report on Schedule 13D filed with the
Securities and Exchange Commission, or (C) the
highest gross price paid or to be paid for a share of
Stock (whether by way of exchange, conversion,
distribution upon merger, liquidation or otherwise)
in any of the transactions set forth in this Section
as constituting a Change of Control.
"TERMINATION FOR JUST CAUSE" means a termination of
the Required Relationship based on fraud,
misappropriation or embezzlement on the part of the
Key Individual which results in a final conviction of
a felony.
(c) In the event of a Change of Control, no amendment, suspension or
termination of the Plan thereafter shall impair or reduce the rights of any
person with respect to any Option granted under the Plan.
10. BENEFICIARY
(a) Each Key Individual may file with the Company a written designation
of one or more persons as the Beneficiary who shall be entitled to receive the
Option, if any, payable under the Plan upon his or her death. A Key Individual
may from time to time revoke or change his or her
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Beneficiary designation without the consent of any prior Beneficiary by filing a
new designation with the Company. The last such designation received by the
Company shall be controlling; provided, however, that no designation, or change
or revocation thereof, shall be effective unless received by the Company prior
to the death of the Key Individual and in no event shall it be effective as of a
date prior to such receipt.
(b) If no such Beneficiary designation is in effect at the time of the
death of a Key Individual or if no designated Beneficiary survives the Key
Individual or if such designation conflicts with law, the estate of the Key
Individual shall be entitled to receive the Option, if any, payable under the
Plan upon his or her death. If the Committee is in doubt as to the right of any
person to receive such Option, the Company may retain such Option, without
liability for any interest thereon, until the Committee determines the rights
thereto, or the Company may deliver such Option into any court of appropriate
jurisdiction and such delivery shall be a complete discharge of the liability of
the Company therefor.
11. ADMINISTRATION OF THE PLAN
(a) All decisions, determinations or actions of the Committee made or
taken pursuant to grants of authority under the Plan shall be made or taken in
the sole discretion of the Committee and shall be final, conclusive and binding
on all persons for all purposes.
(b) The Committee shall have full power, discretion and authority to
interpret, construe and administer the Plan and any part thereof, and its
interpretations and constructions thereof and actions taken thereunder shall be,
except as otherwise determined by the Board, final, conclusive and binding on
all persons for all purposes.
(c) The Committee's decisions and determinations under the Plan need
not be uniform and may be made selectively among Key Individuals, whether or not
such Key Individuals are similarly situated.
(d) The Committee may, in its sole discretion, delegate such of its
powers as it deems appropriate to the Committee Chairman, the chief executive
officer or other members of senior management.
(e) If a Change of Control has not occurred and if the Committee
determines that a Key Individual has taken action inimical to the best interests
of any Participating Company, the Committee may, in its sole discretion,
terminate in whole or in part such portion of any Option as has not yet become
exercisable at the time of termination.
12. AMENDMENT, EXTENSION OR TERMINATION
The Board or the Committee may, at any time, amend or terminate the
Plan for any reason as determined in their sole discretion.
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13. ADJUSTMENTS IN EVENT OF CHANGE IN COMMON STOCK
In the event of any reorganization, merger, recapitalization,
consolidation, liquidation, Stock dividend, Stock split, reclassification,
combination of shares, rights offering, split-up or extraordinary dividend
(including a spin-off) or divestiture, or any other change in the corporate
structure or shares of Stock, the Committee may make such adjustment in the
Stock subject to purchase by an Option, or the terms, conditions or restrictions
on Options, including the price payable upon the exercise of such Option and the
number of shares subject to Option, as the Committee deems equitable.
14. MISCELLANEOUS
(a) Except as provided in Section 9, nothing in this Plan or any Option
granted hereunder shall confer upon any Key Individual any right to continue in
a Required Relationship or any other relationship with any Participating Company
or interfere in any way with the right of any Participating Company to terminate
his or her Required Relationship or any other relationship at any time. No
Option payable under the Plan shall be deemed salary or compensation or other
amount payable to an Employee for the purpose of computing benefits under any
employee benefit plan or other arrangement of any Participating Company for the
benefit of its Employees. No Key Individual shall have any claim to an Option
until it is actually granted under the Plan. To the extent that any person
acquires a right to receive payments from the Company under this Plan, such
right shall be no greater than the right of an unsecured general creditor of the
Company. All payments to be made hereunder shall be paid from the general funds
of the Company and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such amounts.
(b) The Committee may cause to be made, as a condition precedent to the
payment of any Option, or otherwise, appropriate arrangements with the Key
Individual or his or her Beneficiary, for the withholding of any federal, state,
local or foreign taxes determined applicable by the Committee in its sole
discretion.
(c) The Plan and the grant of Options shall be subject to all
applicable federal and state laws, rules, and regulations and to such approvals
by any government or regulatory agency as may be required.
(d) The terms of the Plan shall be binding upon the Company and its
successors and assigns.
(e) Captions preceding the sections hereof are inserted solely as a
matter of convenience and in no way define or limit the scope or intent of any
provision hereof.
15. EFFECTIVE DATE AND TERM OF PLAN
The effective date of the Plan shall be July 20, 2000. No Option shall
be granted under this Plan after the Plan's termination date. The Plan's
termination date shall be July 20, 2010. The Plan will continue in effect for
existing Options as long as any such Option is outstanding.
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