<PAGE> 1
As filed with the Securities and Exchange Commission on April 5, 2000
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HARTFORD LIFE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 06-1470915
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 HOPMEADOW STREET
SIMSBURY, CT 06089
(Address of Principal Executive Offices
including Zip Code)
THE HARTFORD INVESTMENT AND SAVINGS PLAN
(Full title of the Plan)
LYNDA GODKIN, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
HARTFORD LIFE, INC.
200 HOPMEADOW STREET
SIMSBURY, CT 06089
(860) 843-3153
(Name, address and telephone number of agent for service)
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
maximum Proposed
Title of offering maximum
securities to Amount to be price per aggregate Amount of
be registered registered unit offering price registration fee
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value $.01
per share 5,000,000(1) $43.375 $216,875,000(2) $57,255.00
</TABLE>
(1)The number of shares of Company Common Stock to be offered pursuant to The
Hartford Investment and Savings Plan (the "Plan") (5,000,000 shares). In
addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the Plan.
(2)Computed pursuant to Rule 457(h) solely for the purpose of determining the
registration fee, and based on the average of the high and low prices per share
of the Common Stock as reported on the New York Stock Exchange for March 30,
2000.
2
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Incorporated by reference in this Registration Statement are the
following documents heretofore filed by Hartford Life, Inc. (the "Company") with
the Securities and Exchange Commission (the "Commission") pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"):
(a) The Company's latest annual report filed pursuant to Section 13(a) or
15(d) of the Exchange Act;
(b) All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of the fiscal year covered by
the annual report referred to in (a) above;
(c) The description of the Company's Common Stock, par value $.01 per share
(the "Common Stock"), contained in a registration statement filed under
the Exchange Act, and any amendment or report filed for the purpose of
updating such description; and
(d) The Company's Registration Statement on Form S-8 (File No. 333-28807)
of the Plan.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment that indicates that all securities offered hereby have
been sold or that deregisters all such securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be part hereof from the dates of filing of such documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
None.
3
<PAGE> 4
Item 6. Indemnification of Directors and Officers
The Delaware General Corporation Law (the "Delaware Law") permits a
Delaware corporation to include a provision in its Certificate of Incorporation,
and the Company's Amended and Restated Certificate of Incorporation so provides,
eliminating or limiting the personal liability of a director or officer to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director or officer, provided that such provision may not eliminate or
limit the liability of a director (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware Law which makes directors
personally liable for unlawful dividends or unlawful stock repurchases or
redemptions and (iv) any transaction from which a director derives an improper
personal benefit. Under Delaware law, directors and officers may be indemnified
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement in connection with any threatened, pending or completed action,
suit or proceeding whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation (a "derivative
action")) if they acted in good faith and in a manner they reasonably believed
to be in or not opposed to the best interest of the Company and, with respect to
any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful. In derivative actions, indemnification extends only to
expenses (including attorneys' fees) actually and reasonably incurred in
connection with defense or settlement of such an action and, in the event such
person shall have been adjudged to be liable to the corporation, only to the
extent that a proper court shall have determined that such person is fairly and
reasonably entitled to indemnity for such expenses.
The Company's Bylaws provide that directors and officers shall be, and
at the discretion of the Board of Directors, nonofficer employees may be,
indemnified by the Company to the fullest extent authorized by Delaware law, as
it now exists or may in the future be amended, against all expenses and
liabilities reasonably incurred in connection with service for or on behalf of
the Company and further permits the advancing of expenses incurred in defending
claims. The Bylaws also provide that the right of directors and officers to
indemnification shall be a contract right and shall not be exclusive of any
other right now possessed or hereafter acquired under any Bylaw, agreement, vote
of stockholders or otherwise. The Company's Certificate of Incorporation
contains a provision permitted by Delaware law that generally eliminates the
personal liability of directors for monetary damages for breaches of their
fiduciary duty, including breaches involving negligence or gross negligence in
business combinations, unless the director has breached his duty of loyalty,
failed to act in good faith, engaged in intentional misconduct or a knowing
violation of law, paid a dividend or approved a stock repurchase in violation of
the Delaware General Corporation Law or obtained an improper personal benefit.
This provision does not alter a director's liability under the Federal
securities laws. In addition, this provision does not affect the availabi-
4
<PAGE> 5
lity of equitable remedies, such as an injunction or rescission, for breach of
fiduciary duty.
The Company maintains directors' and officers' reimbursement and
liability insurance pursuant to standard form policies. The risks covered by
such policies include certain liabilities under the securities law.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
An Exhibit Index, containing a list of all exhibits filed with this
Registration Statement, is included with this filing. Additionally, the Company
hereby undertakes to (i) submit The Hartford Investment and Savings Plan (the
"Plan") and any amendment thereto to the Internal Revenue Service (the "IRS") in
a timely manner and (ii) make all changes required by the IRS in order to
qualify the Plan under Section 401(a) of the Internal Revenue Code of 1986, as
amended.
Item 9. Undertakings
(a) Rule 415 Offering. The undersigned Company hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this Registration
Statement to:
(i) include any Prospectus required by Section 10(a)(3)
of the Securities Act of 1933 (the "Securities Act"),
unless the information is contained in periodic
reports filed by the Company pursuant to section 13
or section 15(d) of the Exchange Act that are
incorporated by reference in the Registration
Statement;
(ii) reflect in the Prospectus any facts or events arising
after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement,
unless the information is contained in periodic
reports filed by the Company pursuant to Section 13
or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration
Statement;
(iii) include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement.
5
<PAGE> 6
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To file a post-effective amendment to remove from registration
any of the securities being registered which remain unsold at
the termination of the offering.
(b) Subsequent Exchange Act Documents. The undersigned Company hereby
undertakes that, for purposes of determining any liability under the Securities
Act, each filing of the Company's annual report pursuant to section 13(a) or
section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the Exchange
Act) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Indemnification. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
6
<PAGE> 7
SIGNATURES
----------
The Company. Pursuant to the requirements of the Securities Act and the
attached Powers of Attorney filed herewith, the Company certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing
on Form S-8 and has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Hartford,
State of Connecticut on the 31st day of March, 2000.
HARTFORD LIFE, INC.
By: /s/ Amy Gallent
-------------------
Amy Gallent
As Attorney-In-Fact
The Plan. Pursuant to the requirements of the Securities Act, the named
fiduciary of The Hartford Investment and Savings Plan has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Hartford, State of Connecticut, on the 31st day
of March, 2000.
THE HARTFORD INVESTMENT AND SAVINGS
PLAN
By: /s/ Randall L. Kiviat
-----------------------
Chairman of the Pension
Administration Committee (the Named Fiduciary)
7
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
<S> <C>
5 Opinion of Debevoise & Plimpton (filed herewith)
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants
(filed herewith)
23.2 Consent of Debevoise & Plimpton (included in Exhibit 5)
24 Powers of Attorney (filed herewith)
99(i) The Hartford Investment and Savings Plan (as Amended and Restated
effective January 1, 1999) (filed herewith)
</TABLE>
8
<PAGE> 1
Exhibit 5 and 23.2
April 5, 2000
Hartford Life, Inc.
200 Hopmeadow Street
Simsbury, CT 06089
Ladies and Gentlemen:
We have acted as counsel to Hartford Life, Inc., a Delaware corporation (the
"Company"), in connection with the preparation of the Registration Statement on
Form S-8 (the "Registration Statement") to be filed under the Securities Act of
1933 (the "Act") relating to 5,000,000 shares of the Company's common stock, no
par value (the "Common Stock"), to be issued pursuant to The Hartford Investment
and Savings Plan (the "Plan") of The Hartford Financial Services Group, Inc.
We are familiar with the written documents which comprise the Plan, and in
rendering the opinion expressed below, we have examined and are relying on
originals, or copies certified or otherwise identified to our satisfaction, of
such other corporate records, documents, certificates or other instruments, as
in our judgment are necessary or appropriate as a basis for such opinion.
Based on the foregoing, we are of the opinion that the shares of Common Stock
which may be issued by the Company pursuant to the Plan have been duly
authorized and when issued in accordance with the terms of the Plan will be
validly issued, fully paid and non-assessable.
<PAGE> 2
2 April 5,2000
We hereby consent to the filing of this opinion as an exhibit to the Company's
Registration Statement. In giving such consent, we do not hereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Act or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ Debevoise & Plimpton
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 of our report dated January
31, 2000 included in HARTFORD LIFE, INC.'s Form 10-K for the year ended December
31, 1999 and to all references to our Firm included in this Registration
Statement.
/s/ ARTHUR ANDERSEN LLP
Hartford, Connecticut
April 3, 2000
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints AMY GALLENT his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all documents relating to this registration
statement, or amendments thereto, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Ramani Ayer Chairman September 16, 1999
- -------------------------
Ramani Ayer
/s/ Lowndes A. Smith Vice Chairman, Chief Executive September 16, 1999
- ------------------------- Officer and President
Lowndes A. Smith
/s/ Thomas M. Marra Executive Vice September 16, 1999
- ------------------------- President and Director
Thomas M. Marra
/s/ Gail Deegan Director September 16, 1999
- -------------------------
Gail Deegan
/s/ Donald R. Frahm Director September 16, 1999
- -------------------------
Donald R. Frahm
/s/ Paul G, Kirk, Jr. Director September 16, 1999
- -------------------------
Paul G. Kirk, Jr.
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C> <C>
/s/ Robert E. Patricelli Director September 16, 1999
- -------------------------
Robert E. Patricelli
/s/ Robert W. Selander Director September 16, 1999
- -----------------------------
Robert W. Selander
/s/ H. Patrick Swygert Director September 16, 1999
- -----------------------------
H. Patrick Swygert
/s/ Gordon I. Ulmer Director September 16, 1999
- -----------------------------
Gordon I. Ulmer
/s/ David K. Zwiener Director September 16, 1999
- -----------------------------
David K. Zwiener
/s/ David T. Foy Senior Vice President September , 1999
- ----------------------------- and Treasurer
David T. Foy (Chief Financial Officer)
/s/ Mary Jane Fortin Vice President September , 1999
- ----------------------------- (Chief Accounting Officer)
Mary Jane Fortin
*By Vice President and
----------------------------- Corporate Secretary
Amy Gallent as Attorney-In-Fact
September 16, 1999
</TABLE>
<PAGE> 1
EXHIBIT 99(i)
THE HARTFORD
INVESTMENT AND SAVINGS PLAN
(As Amended and Restated effective January 1, 1999)
------------------
PLAN INFORMATION
-----------------
THIS DOCUMENT CONSTITUTES PART OF
A PROSPECTUS COVERING SECURITIES THAT
HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933.
-----------------
2,500,000 Shares of Common Stock, $.01 per share par
value, of The Hartford Financial Services Group, Inc.; 2,500,000 shares
of Class A Common Stock, $.01 per share par value, of Hartford Life,
Inc. and interests in the Plan are offered pursuant to the Plan as
described herein.
-----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------
FOR NORTH CAROLINA RESIDENTS:
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSIONER
OF INSURANCE FOR THE STATE OF NORTH CAROLINA, NOR HAS THE COMMISSIONER OF
INSURANCE RULED UPON THE ACCURACY OR THE ADEQUACY OF THIS DOCUMENT.
REV. JANUARY 1, 1999
<PAGE> 2
Additional information about the Plan and its administration may be
obtained by writing the Manager of Savings Plan Administration, The Hartford
Financial Services Group, Inc. ("The Hartford"), Hartford Plaza, Hartford,
Connecticut, 06115 or telephoning the Manager at (860) 547-5361.
The following documents are incorporated by reference into this
prospectus and shall be a part hereof from the date of filing such documents:
(1) the latest annual report on Form 10-K of The Hartford and the Plan's latest
annual report on Form 11-K filed with the Securities and Exchange Commission
(the "Commission") pursuant to Sections 13(a) or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act"); (2) the registration statement of
Hartford Life, Inc. ("Hartford Life") on Form 10/A, Amendment No. 1, dated May
16, 1997, filed with the Commission pursuant to Section 12(b) of the Exchange
Act; (3) the description of The Hartford's common stock and of Hartford Life's
Class A common stock contained in a registration statement filed under the
Exchange Act, and any amendment or report filed to update such description; and
(4) all documents filed with the Commission by The Hartford, the Plan, or
Hartford Life, pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, since the end of the fiscal years covered by such Forms 10-K, 11-K and Form
10/A, Amendment No. 1 referred to above, and prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold. Any statement
contained in a document incorporated or deemed to be incorporated by reference
in the Prospectus shall be deemed to be modified or superseded for purposes of
the Prospectus to the extent that a statement contained in the Prospectus or in
any other subsequently filed document which also is or is deemed to be
incorporated by reference in the Prospectus modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of the Prospectus. Any
such document, as well as The Hartford's and Hartford Life's most recent annual
report to shareholders and any other report or communication distributed to The
Hartford's and Hartford Life's shareholders generally, may be obtained without
charge by oral or written request to the Manager of Savings Plan Administration,
The Hartford.
<PAGE> 3
TABLE OF CONTENTS
THE HARTFORD INVESTMENT AND SAVINGS PLAN
<TABLE>
<CAPTION>
Article Page
- ------- ----
<S> <C>
One Introduction and Purpose.......................................................... 1
Two Definitions....................................................................... 2
Three Membership........................................................................ 14
Four Member Contributions.............................................................. 15
Five Company Contributions............................................................. 18
Six IRS Limits on Member Savings and Company Contributions ........................... 24
Seven Credits to Member Accounts; Asset Valuation and Allocation ....................... 29
Eight Investment of Contributions in Investment Funds................................... 30
Nine Member Loans Before Termination of Employment .................................... 35
Ten Member Withdrawals Before Termination of Employment .............................. 38
Eleven Distribution From Accounts........................................................ 41
Twelve Qualified Domestic Relations Orders............................................... 46
Thirteen General Matters Relating to Committees ........................................... 48
Fourteen Administration of Plan-Pension Administration Committee .......................... 50
Fifteen Management of Funds- Pension Fund Trust & Investment Committee ................... 51
Sixteen Hardship Withdrawals- Hardship Committee.......................................... 52
Seventeen General and Administrative Provisions............................................. 52
Appendix A .................................................................................. 55
Additional Plan Information......................................................................... 56
Investment Experience............................................................................... 56
Additional Fund Information......................................................................... 56
Summary of Federal Income and Estate Tax Rules ..................................................... 57
</TABLE>
<PAGE> 4
THE HARTFORD
INVESTMENT AND SAVINGS PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1999)
ARTICLE ONE
INTRODUCTION AND PURPOSE
1.1 INTRODUCTION. The Hartford Investment and Savings Plan (the "Plan") was
established effective December 19, 1995 to cover employees of The Hartford and
Hartford Fire. The Hartford was spun-off from ITT Corporation effective December
19, 1995. The Plan was amended and restated effective January 1, 1997. Effective
as of the IPO Date, Hartford Life was designated as a Participating Corporation
for purposes of the Plan.
This Plan shall maintain account balances transferred from the ITT Investment
and Savings Plan for Salaried Employees (the "Pre-Distribution ITT Plan") which
had been maintained by Pre-Distribution ITT through December 18, 1995 for
members who became employees of Hartford Fire on the Distribution Date and for
certain deferred members whose last services for Pre-Distribution ITT were
performed for an insurance business of Pre-Distribution ITT. Certain of these
members, prior to May 9, 1989, were members in the Investment and Savings Plan
for Salaried Employees of Hartford Fire Insurance Company (the "Hartford Plan").
The Hartford Plan was merged into the Pre-Distribution ITT Plan effective on May
9, 1989.
Participation in the Plan is available, as set forth herein, to eligible
employees of The Hartford and Hartford Fire, Hartford Life, and of such other
companies affiliated therewith as may become participating companies under the
Plan. A quarterly statement is sent to each member of the Plan reflecting the
status of his or her Accounts under the Plan as of the end of each calendar
quarter.
The Plan is a defined contribution plan under ERISA, and as such is subject to
the provisions of Titles I, II and III, but not Title IV, thereof. Titles I, II
and III include requirements for covered plans governing reporting, disclosure,
participation, vesting, fiduciary responsibility and enforcement. Title IV
provides for plan termination insurance by the Federal government's Pension
Benefit Guaranty Corporation. This insurance does not apply to defined
contribution plans such as the Plan.
The Bankers Trust Company, New York, New York is the Trustee with respect to the
Plan.
-1-
<PAGE> 5
1.2 PURPOSE. The purpose of the Plan is to (A) supplement retirement income by
encouraging employees to save on a regular and long-term basis; (B) provide
employees with ownership of The Hartford and Hartford Life securities; (C)
provide additional financial resources for emergencies and financial hardships;
and (D) offer employees additional incentives to continue their careers with The
Hartford.
1.3 PROSPECTUS. The Plan (as amended) is included as part of the Prospectus.
1.4 TAX QUALIFICATION. For purposes of qualification under Section 401(a) of the
Internal Revenue Code, the Plan includes a savings plan portion and a stock
bonus portion. The stock bonus portion consists of assets related to the
leveraged employee stock ownership plan in effect from 1989 through the
Distribution Date under the Pre-Distribution ITT Plan, and Floor Company
Contributions made by The Hartford.
ARTICLE TWO
DEFINITIONS
"ACCOUNTS" means, with respect to any Member or Deferred Member, his or her
Basic Investment Account, Supplemental Investment Account, Company Contribution
Account, Rollover Account and ESOP Account.
"ACTUAL CONTRIBUTION PERCENTAGE" means the average of the ratios, calculated
separately for each applicable Employee, of (A) the sum of the After-Tax Savings
and Matching Company Contributions made for a Plan Year to (B) the Employee's
Compensation for that Plan Year. Such Actual Contribution Percentage shall be
computed to the nearest one-hundredth of one percent of the Employee's
Compensation. The non-Highly Compensated Employee Actual Contribution Percentage
shall be determined based on the immediately preceding Plan Year while the
Highly Compensated Employee Actual Contribution Percentage shall be determined
for the then current Plan Year, and Salary shall exclude compensation paid to
the Employee while he or she is not a Member.
"ACTUAL DEFERRAL PERCENTAGE" means the average of the ratios, calculated
separately for each applicable Employee, of (A) the amount of Before-Tax Savings
made on the Employee's behalf for a Plan Year to (B) the Employee's Compensation
for that Plan Year. Such Actual Deferral Percentage shall be computed to the
nearest one-hundredth of one percent of the Employee's Compensation. The
non-Highly Compensated Employee Actual Deferral Percentage shall be determined
based on the immediately preceding Plan Year while the Highly Compensated
Employee Actual Deferral Percentage shall be determined for the then current
Plan Year, and Salary shall exclude compensation paid to the Employee while he
or she is not a Member, and thus shall exclude compensation paid for periods
before the Distribution Date.
-2-
<PAGE> 6
"AFTER-TAX SAVINGS" means savings made by a Member under Section 4.2, and
includes both Basic After-Tax Savings and Supplemental After-Tax Savings.
"BASIC AFTER-TAX INVESTMENT ACCOUNT" means that portion of the Trust Fund which,
with respect to any Member or Deferred Member, is attributable to Basic
After-Tax Savings and any investment earnings and gains or losses thereon.
"BASIC AFTER-TAX SAVINGS" means the contributions made by a Member which are
credited to his or her Basic After-Tax Investment Account in accordance with
Section 4.2(B)(i).
"BASIC BEFORE-TAX INVESTMENT ACCOUNT" means that portion of the Trust Fund
which, with respect to any Member or Deferred Member, is attributable to Basic
Before-Tax Savings and any investment earnings and gains or losses thereon.
"BASIC BEFORE-TAX SAVINGS" means the contributions made on a Member's behalf
which are credited to his or her Basic Before-Tax Investment Account in
accordance with Section 4.1(B)(i).
"BASIC INVESTMENT ACCOUNT" means that portion of the Trust Fund which, with
respect to any Member or Deferred Member, includes his or her Basic Before-Tax
Investment Account and his or her Basic After-Tax Investment Account.
"BASIC SAVINGS" means the Basic After-Tax Savings contributed by a Member and
the Basic Before-Tax Savings contributed on a Member's behalf.
"BEFORE-TAX SAVINGS" means savings made by a Member under Section 4.1, and
includes both Basic Before-Tax Savings and Supplemental Before-Tax Savings.
"BENEFICIARY" means such beneficiary or beneficiaries as may be designated from
time to time by the Member or Deferred Member, on a form provided by the Plan
Administrator for such purpose, to receive, in the event of the Member's or
Deferred Member's death, the value of his or her Accounts at the time of death.
Except as hereinafter provided, in the case of a Member or Deferred Member who
is married, the Beneficiary shall be the Member's or Deferred Member's spouse,
unless such spouse consents, in writing, on a form witnessed by a notary public
to the designation of another person as Beneficiary. A Deferred Member who is an
alternate payee designated as such pursuant to a qualified domestic relations
order may not, however, name a spouse as a Beneficiary. In the case of a Member
or Deferred Member who incurs a divorce under applicable State law prior to
commencing benefits under the Plan, such Member's or Deferred Member's
designation of Beneficiary shall remain valid unless otherwise provided in a
qualified domestic relations order (as described in Article Twelve of the Plan)
or unless such Member or Deferred Member changes his or her Beneficiary or is
subsequently remarried.
"BOARD OF DIRECTORS" means the Board of Directors of Hartford Fire Insurance
Company or of any successor, by merger, purchase or otherwise.
-3-
<PAGE> 7
"BREAK IN SERVICE" means a one-year period in which an employee has less than
501 Hours Worked, which shall be treated as commencing on the date of severance
from Service.
"CODE" means the Internal Revenue Code of 1986, as amended from time to time.
References to any section of the Code shall include any successor provision
thereto.
"COMPANY" means The Hartford and Hartford Fire, as constituted on the
Distribution Date, or any successor, by merger, purchase or otherwise with
respect to their Employees, any Participating Division with respect to its
Employees and any Participating Corporation with respect to its Employees.
"COMPANY CONTRIBUTIONS" means Matching Company Contributions and Floor Company
Contributions made under Article Five, and Matching Company Contributions made
before 1990 under the Pre-Distribution ITT Plan.
"COMPANY CONTRIBUTION ACCOUNT" means that portion of the Trust Fund which, with
respect to any Member or Deferred Member, is attributable to (A) Matching
Company Contributions made under Article Five, (B) Floor Company Contributions
made under Article Five, (C) Matching Company Contributions made for periods
before 1990 under the Pre-Distribution ITT Plan, (D) any contributions and
investment earnings thereon made on his or her behalf and transferred to the
Trust Fund pursuant to a Prior Plan Transfer, and (E) any investment earnings
and gains or losses on any of the aforementioned amounts.
"COMPENSATION" means total wages and other compensation paid to or for the
Member as reported on the Member's Form W-2, Wage and Tax Statement, plus
elective contributions under Code Sections 401(k) and 125, provided that for
purposes of Section 6.4, Compensation means Compensation as defined in Code
Section 415.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the annual
compensation of each Member taken into account under the Plan shall not exceed
the OBRA '93 annual compensation limit, such compensation to be measured for
each individual from the beginning of each calendar year, regardless of whether
such individual has become a Member pursuant to Article Three or elects to
contribute Savings under Article Four. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Secretary of the Treasury to reflect cost-of-living
adjustments in accordance with Code Section 401(a)(17)(B). The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined beginning in such calendar year.
Any reference in this Plan to the limitation under Code Section 401(a)(17) means
the OBRA '93 annual compensation limit set forth in this provision.
"DEFERRED MEMBER" means (A) a Member who has terminated employment with the
Company and whose Vested Share will be deferred in accordance with Article
Eleven, (B) the spouse Beneficiary
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<PAGE> 8
of a deceased Member or Deferred Member, or (C) an alternate payee designated as
such pursuant to a domestic relations order as qualified by the Plan, and shall
include both a Hartford Fire Deferred Member and a Hartford Life Deferred
Member.
"DISABILITY" means, with respect to a Member, the total disability of such
Member that results in the Member qualifying for benefits under the Hartford
Fire Insurance Company Long Term Disability Plan for Salaried Employees or a
similar disability plan sponsored by the Company. If a Member qualifies for
benefits under such plan, then he or she shall be deemed to be totally disabled
as determined by the insurance company that administers such plan. If a Member
does not qualify for benefits under such plans, then he or she shall be deemed
to be totally disabled if his or her disability meets the definition of total
disability set forth in such a plan, as determined by the Plan Committee. For
purposes of this Plan, the effective date of disability shall be the later of
the date of disability as defined in the applicable disability plan or the date
on which the applicable insurance company issues its determination of total
disability. If a Member is deemed to be totally disabled as provided herein, he
or she shall also be deemed to have incurred a Termination of Employment with
the Company and its affiliated corporations as of such date.
"DISTRIBUTION DATE" means December 19, 1995.
"EFFECTIVE DATE" means the Distribution Date with respect to those Participating
Corporations and Participating Divisions that began their participation in the
Plan on such date; "Effective Date" with respect to any other Participating
Corporation or Participating Division shall mean the date as of which such
Participating Corporation or Participating Division begins its participation in
the Plan. The Pre-Distribution ITT Plan was originally effective as of April 1,
1974. Hartford Life was designated as a Participating Corporation effective as
of the IPO Date.
"EMPLOYEE" means any person regularly employed by the Company as a salaried or
regular hourly employee. However, except as the Board of Directors or the Plan
Committee, pursuant to authority delegated to it by the Board of Directors, may
otherwise provide on a basis uniformly applicable to all persons similarly
situated, and, except as specified in Section 2.42 below, no person shall be an
"Employee" for purposes of the Plan:
(A) who is covered for current service under a retirement plan of the
Company or any of its affiliated Companies other than the Hartford Fire
Insurance Company Retirement Plan for U.S. Employees, or any other Plan
specified by the Board of Directors from time to time,
(B) whose terms and conditions of employment are determined by a
collective bargaining agreement with the Company which does not make
this Plan applicable to him or her,
(C) who is eligible for participation in the Hartford Fire Insurance
Company Retirement Savings Plan, Hartford Fire Insurance Company
Deferred Profit Sharing Plan, and Hartford Fire Insurance Company
Employee Profit Sharing Plan or any successor plan (such plans being
maintained by certain Canadian affiliates of the Company), or
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<PAGE> 9
(D) who is a leased employee as defined in Code Section 414(n).
(E) who is classified by the Company as an independent contractor
(regardless of how such person is characterized by the Internal Revenue
Service or any other federal, state or local governmental agency for
income or wage tax purposes or for any other purpose)."
If an individual does not qualify as an Employee as defined above or is
otherwise ineligible to participate in the Plan, and such individual is later
required by a court or government agency to be classified as an employee of the
Company, such individual shall not be eligible to participate in the Plan,
notwithstanding such classification, unless and until designated as a Member by
the Plan Administrator, and if so designated, the participation of such
individual in the Plan shall be prospective only.
"ENROLLMENT DATE" means the first day of any payroll period that begins on or
after the date an Employee satisfies the membership requirements set forth in
Article Three.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
"ESOP ACCOUNT" means that portion of the Trust Fund which, with respect to any
Member or Deferred Member, is attributable to allocations made under the
employee stock ownership plan portion of the Pre-Distribution ITT Plan.
"FLOOR COMPANY CONTRIBUTION" means a contribution made on or after the
Distribution Date pursuant to Section 5.2.
"HARDSHIP COMMITTEE" means the Hardship Committee established hereunder for the
purposes set forth in Article Fourteen.
"HARTFORD FIRE" means Hartford Fire Insurance Company or a successor by merger,
purchase or otherwise with respect to its employees. Hartford Fire is the
sponsor of the Plan.
"HARTFORD FIRE DEFERRED MEMBER" means any person who is a Deferred Member and
who is not also a Hartford Life Deferred Member.
"HARTFORD FIRE MEMBER" means a person principally employed by Hartford Fire who
becomes a Member as provided in Article Three.
HARTFORD FIRE PLAN" means the Investment and Savings Plan of Hartford Fire
Insurance Company as in effect on May 8, 1989.
"HARTFORD LIFE" means Hartford Life, Inc. (a Delaware corporation), as
constituted on the IPO Date, and Hartford Life and Accident Insurance Company,
or a successor of either of the foregoing by
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<PAGE> 10
merger, purchase or otherwise with respect to their Employees, both of which are
affiliated with The Hartford, and with Hartford Fire, the sponsor of this Plan.
"HARTFORD LIFE DEFERRED MEMBER" means a person who was a Hartford Life Member on
the date of such person's Termination of Employment, and any other Deferred
Member whose rights under the Plan are derived from such a Hartford Life Member.
"HARTFORD LIFE MEMBER" means a person principally employed by Hartford Life who
becomes a Member as provided in Article Three.
"HARTFORD LIFE STOCK" shall mean the Class A common stock of Hartford Life,
Inc., par value $.01 per share.
"HIGHLY COMPENSATED MEMBER" shall mean, with respect to any Plan Year any Member
who (A) in the Plan Year or the immediately preceding Plan Year was a five
percent owner, or (B) in the immediately preceding Plan Year earned annual
Compensation from the Company or an affiliated company which exceeds a dollar
amount that is indexed annually and is determined pursuant to Code Section
414(q)(1)(B), which amount shall be adjusted at the same time and in the same
manner as the dollar limit on benefits under a defined benefit plan is adjusted
pursuant to Code Section 415(d).
"HOURS WORKED" means hours for which an Employee is compensated whether or not
he or she has worked, such as paid holidays, paid vacation, paid sick leave and
paid time off, and back pay for the period for which it was awarded, and each
such hour shall be computed as only one hour, even though he or she is
compensated at more than the straight time rate. With respect to any period for
which an Employee is compensated but has not worked, hours counted shall be
included on the basis of the Employee's normal work-day or work-week. This
definition of Hours Worked shall be applied in compliance with 29 Code of
Federal Regulations Section 2530.200b-2(b) and (c), as promulgated by the United
States Department of Labor, in a consistent and nondiscriminatory manner.
"INVESTMENT FUNDS" means the funds approved by the Pension Fund Trust and
Investment Committee from time to time, in which contributions permitted by the
Plan may be invested.
"IPO" means the initial public offerings of Hartford Life Stock.
"IPO DATE" means May 22, 1997, the date of consummation of the IPO.
"IRS" means the Federal Internal Revenue Service.
"LIMITATION YEAR" means the calendar year.
"LOAN VALUATION DATE" means the business day on which a Member's properly
completed application for a loan under the Plan is made in the form or manner
required by the Savings Plan Administrator.
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"MATCHING COMPANY CONTRIBUTION" means a contribution made pursuant to Section
5.1.
"MEMBER" shall mean any person who has become a Member as provided in Article
Three, and shall include both a Hartford Fire Member and a Hartford Life Member.
"MINIMUM COMPANY CONTRIBUTION" means any contribution made by the Company under
the Section 5.3.
"NON-U.S. CITIZEN EMPLOYEE" means any person who qualifies as an "Employee" as
defined in this Plan (except for any portion of such definition relating to
payment from a United States payroll), and who is:
(A) not a citizen of the United States,
(B) paid from a payroll maintained in the continental United States,
Hawaii, Puerto Rico or the U.S. Virgin Islands, and
(C) employed by the Company in a permanent position (as distinguished
from a temporary assignment) in the continental United States, Hawaii,
Puerto Rico or the U.S. Virgin Islands, even though such person may be
covered under a retirement plan of the Company other than those
enumerated in the definition of "Employee" contained in this Plan,
provided that upon reassignment outside the continental U.S., Hawaii,
Puerto Rico or the U.S. Virgin Islands the participation of such person
shall cease. Notwithstanding the foregoing, (i) the hire or assignment
on or after January 1, 1993 of a Non-U.S. Citizen Employee who is
participating in such other Company retirement plan to a position in
the continental United States, Hawaii, Puerto Rico or the U.S. Virgin
Islands at a Participating Corporation or a Participating Division, is
deemed to be the hiring or assignment for a permanent position, for
purposes of eligibility for Plan membership, from and after the date on
which the Employee has been in such position for a period of thirty-six
consecutive months, and (ii) the hire or assignment on or after January
1, 1995 of a Non-U.S. citizen Employee who is participating in such
other Company retirement plan and immediately preceding such hire or
assignment participated in Hartford Fire Insurance Company Retirement
Savings Plan, Hartford Fire Insurance Company Deferred Profit Sharing
Plan and Hartford Fire Insurance Company Employees Profit Sharing Plan
(such plans being maintained for certain Canadian affiliates of The
Hartford) to a position in the continental United States, Hawaii,
Puerto Rico or the U.S. Virgin Islands at a Participating Corporation
or a Participating Division, is deemed to be the hiring or assignment
for a permanent position, for purposes of eligibility for Plan
membership.
"PARTICIPATING CORPORATION" means any affiliate of Hartford Fire which, by
action of the Board of Directors (or by an officer of Hartford Fire under
authority delegated by the Board of Directors) has been designated as a
Participating Corporation in the Plan as to all of its employees, or as to the
employees of one or more of its operating or other units, and whose Board of
Directors has adopted this Plan.
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<PAGE> 12
"PARTICIPATING DIVISION" means any division or unit of Hartford Fire or an
affiliate of Hartford Fire which, by action of the Board of Directors (or by an
officer of Hartford Fire under authority delegated by the Board of Directors)
has been designated as a Participating Division or Unit in this Plan as to all
of its employees, or as to the employees of one or more of its operating
subdivisions or other sub-units, and in the case of a division or unit of an
affiliate of Hartford Fire, the Board of Directors of such affiliate has adopted
this Plan on behalf of such division or unit. .
"PENSION ADMINISTRATION COMMITTEE" means the Committee established hereunder for
the purposes of administering the Plan as provided in Article Fourteen.
"PENSION FUND TRUST AND INVESTMENT COMMITTEE" means the Committee established
hereunder for the purposes of managing the investment of Plan assets as set
forth in Article Fifteen.
"PLAN" means The Hartford Investment and Savings Plan, as set forth herein or as
amended from time to time.
"PLAN ADMINISTRATOR" (formerly referred to as the Savings Plan Administrator)
means the administrator for the Plan at its offices at Hartford Plaza, Hartford,
CT 06115.
"PLAN YEAR" means (A) for Plan Years beginning before January 1, 1997, the
12-month period beginning on January 1, and ending on December 31, (B) for the
Plan Year beginning on January 1, 1997, the period beginning on January 1, 1997
and ending on December 30, 1997, or (C) for Plan Years beginning after December
30, 1997, the 12-month period beginning on December 31 and ending on December
30.
"PRE-DISTRIBUTION ITT" means ITT Corporation (a Delaware corporation), as
constituted on the day before the Distribution Date.
"PRE-DISTRIBUTION ITT PLAN" means the ITT Investment and Savings Plan For
Salaried Employees, as in effect on the day before the Distribution Date.
"PRINCIPAL EMPLOYMENT DATE" means the first day of the first payroll period
following the date a person becomes principally employed by the Company.
"PRIOR PLAN TRANSFER" means that portion of a Company Contribution Account or
Supplemental Investment Account that is attributable to amounts transferred from
the trust of a qualified profit sharing or other defined contribution plan
previously in effect at a Participating Corporation or Participating Division to
the extent permitted by Article Four.
"QDRO" means an order determined to be a qualified domestic relations order
under Article Twelve.
"RETIREMENT" means early or normal retirement under the Hartford Fire Insurance
Company
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<PAGE> 13
Retirement Plan for U.S. Employees, or any other Plan specified by the Board of
Directors from time to time, as such Plan may be amended from time to time,
provided such retirement results in the Member's separation from the employment
of the Company. Normal retirement may be elected under the above-stated
Retirement Plans on or after the first day of the calendar month coincident with
or next following the 65th anniversary of an Employee's birth and completion of
one year of service. Early retirement may be elected at any time after the 50th
anniversary of an Employee's birth, provided service requirements specified in
the stated Retirement Plans are met. "Retirement" for Members not covered by the
above stated Retirement Plans shall mean separation from service on or after
attaining age 65.
"ROLLOVER ACCOUNT" means the portion of the Trust Fund which, with respect to a
Member or Deferred Member, is attributable to Rollover Contributions and any
investment earnings and gains or losses thereon.
"ROLLOVERS" means the rollover contributions permitted by Article Four.
"SALARY" means an Employee's compensation from the Company at his or her base
rate, excluding any compensation deferred under a deferred compensation plan,
and determined before any election by the Member pursuant to Section 4.1(A)
hereof and before any election by the Member under Code Section 125, excluding
any overtime, bonus, foreign service allowance or any other form of
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<PAGE> 14
compensation, except to the extent otherwise deemed "Salary" for purposes of the
Plan under such nondiscriminatory rules as may be adopted by the Pension
Administration Committee with respect to all Members or any particular
Participating Company or Participating Division.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the annual
salary of each Member taken into account under the Plan shall not exceed the
OBRA '93 annual compensation limit, such compensation to be measured for each
individual from the beginning of each calendar year, regardless of whether such
individual has become a Member pursuant to Article Three or elects to contribute
Savings under Article Four. The OBRA '93 annual compensation limit is $150,000,
as adjusted by the Secretary of the Treasury to reflect cost-of-living
adjustments in accordance with Code Section 401(a)(17)(B). The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which salary is determined beginning in such calendar year. Any
reference in this Plan to the limitation under Code Section 401(a)(17) shall
mean the OBRA '93 annual compensation limit set forth in this provision.
"SAVINGS" means Before-Tax Savings and After-Tax Savings permitted under Article
Four.
"SERVICE" means the period of elapsed time beginning on the date a person
becomes an Employee of the Company or any subsidiary, affiliate or predecessor
of the Company, and ending on his or her most recent severance date, which shall
be the earlier of (A) the date he or she quits, is discharged, retires or dies
or (B) the first anniversary of the date on which he or she is first absent from
service, with or without pay, for any reason such as vacation, sickness,
disability, layoff or leave of absence. If Service is interrupted for maternity
or paternity reasons, meaning an interruption of Service by reason of (i) the
pregnancy of the Employee, (ii) the birth of a child of the Employee or (iii)
the placement of a child with the Employee by reason of adoption, or for
purposes of caring for a newborn child of the Employee immediately following the
birth or adoption of the newborn, then the date of severance from Service shall
be the earlier of (a) the date he or she quits, is discharged, retires or dies,
or (b) the second anniversary of the date on which he or she is first absent
from service. If an Employee terminates and is later reemployed within 12 months
of (I) his or her date of termination or (II) the first day of an absence from
service immediately preceding his or her date of termination, if earlier, the
period between his or her severance date and his or her date of reemployment
shall be included in his or her Service. With respect to Service for purposes of
the vesting schedule in Section 5.3, if an Employee terminates and is later
reemployed after 12 or more months have elapsed since his or her severance date,
the period of service prior to his or her severance date shall be included in
his or her Service.
Under the circumstances hereinafter stated and upon such conditions as the
Pension Administration Committee shall determine on a basis uniformly applicable
to all Employees similarly situated, the period of Service of an Employee shall
be deemed not to be interrupted by an absence of the type hereinafter stated and
the period of such absence shall be included in determining the length of an
Employee's Service if a leave of absence has been authorized by the Company or
any affiliate of the Company (for the period of such authorized leave of absence
only), or if an Employee enters service
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<PAGE> 15
in the armed forces of the United States and his or her right to reemployment is
protected by the Selective Service Act or any similar law then in effect, and
the Employee returns to regular employment within the period during which the
right to reemployment is protected by any such law.
As provided in Section 3.4, periods of employment with Pre-Distribution ITT
prior to the Distribution Date shall be treated as periods of employment with
The Hartford and Hartford Fire.
Periods of employment by an Employee with The Prudential Insurance Company of
America (the "Prudential") in its AARP Operations Division prior to June 1, 1997
shall be treated as periods of employment with the Company so long as such
Employee becomes employed by the Company during June, 1997 in accordance with
and under the terms of the AARP GHIP Management Agreement dated February 26,
1997 immediately following employment with the Prudential. Periods of employment
by and Employee with United HealthCare Insurance Company during the period June
1, 1997 through December 31, 1997 shall be treated as periods of employment with
the Company so long as such Employee becomes employed by the Company during 1997
in accordance with and under the terms of the AARP GHIP Management Agreement
dated February 26, 1997 immediately following employment with United HealthCare
Insurance Company, if such employment with United HealthCare Insurance Company
immediately followed employment with the Prudential in its AARP Operations
Division.
"SUPPLEMENTAL AFTER-TAX INVESTMENT ACCOUNT" means the portion of the Trust Fund
that is attributable to Supplemental After-Tax Savings and any investment
earnings and gains or losses thereon.
"SUPPLEMENTAL AFTER-TAX SAVINGS" means contributions credited to the
Supplemental After-Tax Investment Account under Section 4.2(B)(ii) or pursuant
to a Prior Plan Transfer.
"SUPPLEMENTAL BEFORE-TAX INVESTMENT ACCOUNT" means the portion of the Trust Fund
attributable to Supplemental Before-Tax Savings and any investment earnings and
gains or losses thereon.
"SUPPLEMENTAL BEFORE-TAX SAVINGS" means contributions credited to the
Supplemental Before-Tax Investment Account under Section 4.1(B)(ii) or pursuant
to a Prior Plan Transfer.
"SUPPLEMENTAL INVESTMENT ACCOUNT" means the portion of the Trust Fund that
includes the Supplemental Before-Tax Investment Account and the Supplemental
After-Tax Investment Account.
"SUPPLEMENTAL SAVINGS" means Supplemental Before-Tax Savings and Supplemental
After-Tax Savings contributed under Article Four, as well as Supplemental
Before-Tax and After-Tax Savings made pursuant to a Prior Plan Transfer.
"TERMINATION OF EMPLOYMENT" means a voluntary or involuntary separation from
employment with the Company for any reason, including, but not limited to,
Retirement, death, Disability, resignation or dismissal by the Company, but
shall not include a transfer in employment between
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<PAGE> 16
the Company and any other Participating Corporation. With respect to any leave
of absence and any period of service in the armed forces of the United States,
the rules contained in the definition of Service contained in the Plan shall
apply.
"THE HARTFORD" means The Hartford Financial Services Group, Inc. (a Delaware
corporation), which is affiliated with Hartford Fire (the sponsor of the Plan).
"THE HARTFORD STOCK" means common stock of The Hartford Financial Services Group
Inc., par value $.01 per share.
"TRANSFER OPENING DATE" means the later of (A) the first business day of the
second month following the month in which the IPO Date occurs, or (B) such other
date as may be designated by the Pension Administration Committee for the
opening of The Hartford Life Company Stock Fund for acceptance of transfers
pursuant to Section 8.3(E).
"TRUST FUND" means the aggregate funds held by the Trustee under the trust
agreement or agreements established for the purposes of this Plan or the
aggregate funds held under an insurance contract or contracts established with
The Hartford or its affiliates, consisting of the funds described in Article
Eight.
"TRUSTEE" means the Trustee at any time acting as such under the trust agreement
established for the purposes of the Plan.
"VALUATION DATE" means the day the Trust Fund is valued for a particular purpose
in accordance with Article Eight.
"VESTED COMPANY CONTRIBUTION ACCOUNT" means the portion of a Company
Contribution Account that is vested under Article Five.
"VESTED SHARE" means the portion of Accounts that vested under Articles Four and
Five.
"WITHDRAWAL VALUATION DATE" means (A) for non-hardship withdrawals under Section
10.1, the business day that the Plan Administrator or designee receives the
request for such a withdrawal (which request must be made in the manner and by
the date required by the Plan Administrator, or (B) for hardship withdrawals
under Section 10.2, the business day that the Hardship Committee or designee
receives the request for such a withdrawal (which request must be made in the
manner and by the date required by the Plan Administrator).
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<PAGE> 17
ARTICLE THREE
MEMBERSHIP
3.1. ELIGIBILITY FOR MEMBERSHIP. An Employee shall become eligible to be a
Member on the later of (A) the date such Employee completes six months of
Service as an Employee, or (B) the Employee's attainment of age 19.
3.2. BECOMING A MEMBER BY MAKING AN ENROLLMENT ELECTION. An Employee who is
eligible to become a Member shall become a Member by making an enrollment
election before an Enrollment Date and in the manner and by the time required by
the Plan Administrator. By making an enrollment election, the Employee: (A)
designates the rate of his or her After-Tax Savings, (B) authorizes the Company
to make regular payroll deductions of the amount of his or her After-Tax
Savings, if any, (C) designate the rate of his or her Before-Tax Savings, (D)
authorizes the Company to reduce his or her Salary by the amount of his or her
Before-Tax Savings, if any, (E) makes an investment election as described in
Article Seven, and (F) designates a beneficiary for his or her Accounts.
3.3 FAILURE TO MAKE PROPER ENROLLMENT ELECTION. In the case of an Employee who
is eligible to become a Member but does not make a proper enrollment election,
such Employee shall automatically become a Member hereunder as of the date such
Employee is eligible to become a Member (or as soon as practicable thereafter).
Such an Employee shall be entitled to Floor Company Contributions under the Plan
as of such date, and shall be deemed to have made elections to: (A) designate a
zero rate of After-Tax Savings, (B) designate a zero rate of Before-Tax Savings,
and (C) designate his or her Spouse as Beneficiary hereunder if such Member is
married, and to designate his or her estate as Beneficiary hereunder if such
Member is unmarried. Such and Employee may elect to change such deemed elections
as permitted by the Plan.
3.4 PRE-DISTRIBUTION ITT PLAN PARTICIPANTS: CONTINUITY OF MEMBERSHIP, SERVICE
AND INCIDENTS OF PARTICIPATION. Each person who was a "Member" or "Deferred
Member" under the Pre-Distribution ITT Plan on the day before the Distribution
Date, and whose Accounts were transferred to this Plan, shall be a Member or
Deferred Member under this Plan as of the Distribution Date. The Service of such
Members or Deferred Members while employed by Pre-Distribution ITT before the
Distribution Date shall be treated as service with Hartford Fire under this
Plan, except as specifically provided to the contrary in this Plan. All
incidents of participation with respect to such Members or Deferred Members
under the Pre-Distribution ITT Plan for periods before the Distribution Date,
including any elections or designations in effect on the day before the
Distribution Date, shall be taken into account for purposes of this Plan, except
as specifically provided herein to the contrary.
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<PAGE> 18
3.5. REHIRED MEMBERS.
(A) REHIRED MEMBERS WHO MAKE PROPER ENROLLMENT ELECTIONS. Any rehired
Employee who at the time of Termination of Employment was a Member of
this Plan or of the Pre-Distribution ITT Plan will again become a
Member as of the first available payroll cycle following the date of
such Employee's rehire (the "Re-Enrollment Date"), provided that the
Employee makes a proper enrollment election under this Article Three.
(B) REHIRED MEMBERS WHO DO NOT MAKE PROPER ENROLLMENT ELECTIONS. In the
case of a rehired Employee who was a Member at the time of Termination
of Employment, and who does not make a proper enrollment election with
respect to the Re-Enrollment Date, such Employee shall automatically
become a Member as of the first available payroll cycle following the
Re-Enrollment Date (or as soon as practicable thereafter). Such a
Member shall be entitled to Floor Company Contributions under the Plan
as of such date, and shall be deemed to have made elections to: (i)
designate a zero rate of After-Tax Savings, (ii) designate a zero rate
of Before-Tax Savings, and (iii) designate his or her Spouse as
Beneficiary hereunder if such Member is married, and if not married, to
designate his or her estate as Beneficiary hereunder. Such an employee
may change such deemed elections as permitted by the Plan.
ARTICLE FOUR
MEMBER CONTRIBUTIONS
4.1. MEMBER BEFORE-TAX SAVINGS.
(A) SALARY REDUCTION ELECTION FOR BEFORE-TAX SAVINGS. A Member may
elect, subject to the IRS limits described in Article Six and any other
Plan limits, to have his or her Salary reduced (by payroll deduction)
by 2%, 3%, 4%, 5%, 6%, 7%, 8%, 9%, 10%, 11%, 12%, 13%, 14%, 15% or 16%,
and to have that amount contributed to the Trust Fund as Before-Tax
Savings. Such election shall be made in the manner and by the date
required by the Plan Administrator, and shall be effective with the
next payroll paid after the election (or as soon as practicable
thereafter). A Member's election shall continue to apply
notwithstanding a change in his or her principal employer from one
Participating Corporation to another Participating Corporation, unless
the Member changes or suspends his or her Salary reduction rate or
savings as permitted by the Plan.
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<PAGE> 19
(B) TYPES OF BEFORE-TAX SAVINGS; CREDITING OF BEFORE-TAX SAVINGS TO
ACCOUNTS.
(i) BASIC BEFORE-TAX SAVINGS. Before-Tax Savings that do not
exceed 6% of a Member's Salary for the period during which
such contributions are made shall be known as "Basic
Before-Tax Savings," and shall be credited to the Member's
Basic Before-Tax Investment Account.
(ii) SUPPLEMENTAL BEFORE-TAX SAVINGS. Before-Tax Savings that
exceed the maximum allowed under the preceding paragraph shall
be known as "Supplemental Before-Tax Savings," and shall be
credited to a Member's Supplemental Before-Tax Investment
Account. Supplemental Before-Tax Savings may also include
amounts credited on a Member's behalf pursuant to a Prior Plan
Transfer.
(C) CHANGE IN SALARY REDUCTION ELECTION FOR BEFORE-TAX SAVINGS. A
Member may elect to change the rate of his or her Salary reduction for
Before-Tax Savings as of any business day by giving notice to the
Company in a manner and by the date required by the Plan Administrator.
The changed rate of Salary reduction shall be effective as of the next
payroll period (or as soon as practicable thereafter).
(D) VESTING OF BEFORE-TAX SAVINGS. Before-Tax Savings credited to a
Member's Accounts shall at all times be fully vested and
nonforfeitable.
4.2. MEMBER AFTER-TAX SAVINGS.
(A) SALARY REDUCTION ELECTION FOR AFTER-TAX SAVINGS. A Member may
elect, subject to the IRS limits described in Article Six and any other
Plan limits, to have his or her Salary reduced (by payroll deductions)
by 1%, 2%, 3%, 4%, 5%, 6%, 7%, 8%, 9%, 10%, 11%, 12%, 13%, 14%, 15% or
16%, and to have that amount contributed to the Trust Fund as After-Tax
Savings, except that (i) a Member may not elect to contribute After-Tax
Savings of more than the difference between 16% of Salary and the
amount of Before-Tax Savings properly elected, and (ii) a Member who
elects to contribute only After-Tax Savings shall be subject to a
minimum contribution of 2% of Salary. Such election shall be made in
the manner and by the date required by the Plan Administrator, and
shall be effective with the next payroll paid after the election (or as
soon as practicable thereafter). A Member's election shall continue to
apply notwithstanding a change in his or her principal employer from
one Participating Corporation to another Participating Corporation,
unless the Member changes or suspends his or her Salary reduction rate
or savings as permitted by the Plan.
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(B) TYPES OF AFTER-TAX SAVINGS; CREDITING OF AFTER-TAX SAVINGS TO
ACCOUNTS.
(i) BASIC AFTER-TAX SAVINGS. After-Tax Savings that do not
exceed the difference between 6% of a Member's Salary for the
period during which such contributions are made and the amount
credited as Basic Before-Tax Savings for that period shall be
known as "Basic After-Tax Savings" and shall be credited to
the Member's Basic After-Tax Investment Account.
(ii) SUPPLEMENTAL AFTER-TAX SAVINGS. After-Tax Savings that
exceed the maximum allowed under the preceding paragraph shall
be known as "Supplemental After-Tax Savings" and shall be
credited to the Member's Supplemental After-Tax Investment
Account. Supplemental After-Tax Savings may also include
amounts credited on a Member's behalf pursuant to a Prior Plan
Transfer.
(C) CHANGE IN SALARY REDUCTION ELECTION FOR AFTER-TAX SAVINGS. A Member
may elect to change the rate of his or her Salary reduction for
After-Tax Savings as of any business day by giving notice to the
Company in the manner and by the date required by the Plan
Administrator. The changed rate of Salary reduction shall be effective
as of the next payroll period (or as soon as practicable thereafter).
(D) VESTING OF AFTER-TAX SAVINGS. After-Tax Savings credited to a
Member's Accounts shall at all times be fully vested and
nonforfeitable.
4.3 MEMBER ROLLOVER CONTRIBUTIONS.
(A) CONTRIBUTION OF ROLLOVERS. A Member may elect, subject to the IRS
limits described in Article Six and any other Plan limits, to
contribute any of the following amounts to the Trust Fund: (i) a
distribution or proceeds from a sale of distributed property that
qualifies as an Eligible Rollover Distribution as defined in Article
Eleven hereof from a trust described in Code Section 401(a) and exempt
from tax under Code Section 501(a), (ii) a distribution from a
"conduit" individual retirement account or annuity, provided the entire
amount of the distribution is from a source described in clause (i)
hereof, or (iii) a Prior Plan Transfer, which means a direct rollover
or transfer from a prior employer's plan, provided that (a) the Member
can establish to the satisfaction of the Plan Administrator that such
prior employer's plan assets meets the qualification requirements under
Code Section 401(a), and (b) a trust-to-trust transfer shall not be
permitted unless the amount transferred is free of all defined benefit
characteristics and does not make the Plan a transferee plan under Code
Section 401(a)(11)(B)(iii)(III). Any amount so contributed must be paid
to the Trustee (or transferred directly from a prior plan) on or before
the sixtieth day after the Member receives such amount and shall be
held in the Trust Fund and credited to a separate Rollover Account on
behalf of the Member.
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<PAGE> 21
(B) VESTING IN ROLLOVERS. Amounts credited to a Member's Rollover
Account shall at all times be fully vested and nonforfeitable.
4.5 SUSPENSION AND RESUMPTION OF MEMBER SAVINGS.
(A) MEMBER ELECTION TO SUSPEND SAVINGS. A Member may elect to suspend
or resume his or her Before-Tax or After-Tax Savings as of any business
day by giving notice to the Company in the manner and by the time
required by the Plan Administrator. Such suspension or resumption will
be effective as of the next payroll period (or as soon as practicable
thereafter).
(B) SUSPENSION DUE TO HARDSHIP WITHDRAWAL. A Member who takes a
hardship withdrawal from his or her Supplemental Before-Tax Investment
Account or Basic Before-Tax Investment Account under Section 10.2 may
elect to suspend savings under the Plan for a period of not less than
12 months in lieu of disclosing his or her financial resources. Such
suspension will be effective as of the later of the next payroll period
after the Valuation Date that applies to the withdrawal (or as soon as
practicable thereafter). During such suspension, Floor Company
Contributions will continue to be made on behalf of the Member, but no
Matching Company Contributions shall be made on his or her behalf.
Also, the Member will continue to be considered a Member for purposes
of Article Six. Savings may be resumed by giving notice to the Company
in the manner and by the date required by the Plan Administrator. Such
resumption shall be effective as of the next payroll period following
the 12 month suspension period (or as soon as practicable thereafter).
4.6 MEMBER ELECTIVE TRANSFERS. A Member may make an elective transfer to the
Plan, provided such elective transfer (A) is from a plan qualified under Code
Section 401(a), (B) results from the Company's acquisition of assets or a
subsidiary within the meaning of Code Section 401(k)(10), and (C) meets the
requirements of Code Section 414(l) and Treasury Regulation 1.411(d)(4), Q&A
3(b).
ARTICLE FIVE
COMPANY CONTRIBUTIONS
5.1. MATCHING COMPANY CONTRIBUTIONS.
(A) MATCHING COMPANY CONTRIBUTIONS WITH RESPECT TO BASIC SAVINGS.
Subject to the IRS limits described in Article Six and any other Plan
limits, the Company shall, with respect to each Member principally
employed by it, contribute to the Trust Fund a Matching Company
Contribution in an amount equal to 50% of such Member's Basic Savings
for each payroll
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<PAGE> 22
period. (No Matching Company Contributions shall be made with respect
to a Member's Supplemental Savings.) Such Matching Company Contribution
shall be credited to such Member's Company Contribution Account, as
follows:
(i) HARTFORD FIRE MEMBERS. For Hartford Fire Members, Matching
Company Contributions shall be made as of the Principal
Employment Date in cash or in The Hartford Stock (including
treasury shares or newly issued shares of The Hartford Stock
previously authorized but unissued), as determined by the
Company.
(ii) HARTFORD LIFE MEMBERS. For Hartford Life Members,
Matching Company Contributions shall be made as of the
Principal Employment Date in cash or in Hartford Life Stock
(including treasury shares or newly issued shares of Hartford
Life Stock previously authorized but unissued), as determined
by the Company. However, notwithstanding anything herein to
the contrary (and to the extent permitted by applicable law),
no Hartford Life Stock shall be issued or otherwise provided
to any Member hereunder, and the Company shall have no
obligation to issue or otherwise provide Hartford Life Stock
to any Member hereunder, if such issuance or provision of
Hartford Life Stock would cause the direct or indirect
percentage ownership of The Hartford of the combined voting
power or the value of the capital stock of Hartford Life, Inc.
to fall below 80%.
(B) NO MATCHING COMPANY CONTRIBUTIONS FOLLOWING CERTAIN WITHDRAWALS.
Notwithstanding Section 5.1(A), Matching Company Contributions shall
not be made in respect of a Member's Basic Savings during a suspension
period that follows a hardship withdrawal under Article Ten.
5.2. FLOOR COMPANY CONTRIBUTIONS. Subject to the IRS limits described in Article
Six and any other Plan limits, the Company shall, with respect to each Member
employed by it, contribute to the Trust Fund a Floor Company Contribution in an
amount equal to one-half of one percent (0.5%) of such Member's Salary for each
payroll period. Floor Company Contributions shall be credited to such Member's
Company Contribution Account, and shall be made in the same form (i.e., either
The Hartford or Hartford Life Stock) as the Matching Company Contributions made
during that period.
5.3 VESTING OF AMOUNTS IN COMPANY CONTRIBUTION ACCOUNTS.
(A) VESTING IN MATCHING COMPANY CONTRIBUTIONS.
(i) GENERAL RULES. A Member shall be fully vested in, and have
a nonforfeitable right to, the portion of his or her Company
Contribution Account that is attributable to Matching Company
Contributions in accordance with the following schedule:
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<PAGE> 23
<TABLE>
<CAPTION>
YEARS OF SERVICE PERCENTAGE OF COMPANY CONTRIBUTION THAT IS VESTED
---------------- -------------------------------------------------
<S> <C>
less than 1 year 0%
1 but less than 2 years 20%
2 but less than 3 years 40%
3 but less than 4 years 60%
4 but less than 5 years 80%
5 or more years 100%
</TABLE>
(ii) EARLIER VESTING IN CERTAIN CIRCUMSTANCES. Notwithstanding
the foregoing schedule, a Member shall immediately be fully
vested in 100% of his or her Company Contribution Account upon
the earlier of: (a) the Member reaching age 65, (b) the
Member's Retirement, (c) the Member's Disability, (d) the
Member's death, (e) the termination of the Plan, or (f) the
complete discontinuance of Company contributions under the
Plan.
(B) VESTING IN FLOOR COMPANY CONTRIBUTIONS. Each Member and Deferred
Member shall at all times be fully vested in the portion of his or her
Company Contribution Account attributable to Floor Company
Contributions.
(C) VESTING IN AMOUNTS ATTRIBUTABLE TO A PRIOR PLAN TRANSFER. Each
Member and Deferred Member shall at all times be fully vested in the
portion of his or her Company Contribution Account attributable to a
Prior Plan Transfer.
(D) SPECIAL RULES FOR CERTAIN ESOP AND COMPANY CONTRIBUTION ACCOUNT
BALANCES.
(i) MEMBERS WHO PREVIOUSLY WORKED FOR PRE-DISTRIBUTION ITT. A
Member who performed services for Pre-Distribution ITT at any
time between June 30, 1995 and the Distribution Date shall be
fully vested in the amounts credited to his or her ESOP
Account and Company Contribution Account as of the
Distribution Date.
(ii) FORFEITURES BY MEMBERS WHO DID NOT PREVIOUSLY WORK FOR
PRE-DISTRIBUTION ITT. In the case of a Member or Deferred
Member who did not perform services for Pre-Distribution ITT
between June 30, 1995 and the Distribution Date, any amounts
in his or her ESOP Account and Company Contribution Account
that were forfeited under Section 5.5(a) of the
Pre-Distribution ITT Plan shall remain forfeited, except to
the extent restored pursuant to this Article Five on account
of subsequent employment with the Company.
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<PAGE> 24
5.4 FORFEITURE OF CERTAIN UNVESTED AMOUNTS IN COMPANY CONTRIBUTION ACCOUNTS.
(A) TERMINATION OF EMPLOYMENT: FORFEITURE AND RESTORATION OF FORFEITED
AMOUNTS. In the event of Termination of Employment of a Member for any
reason other than one listed in Section 5.3(A)(ii), the unvested
portion of the Member's Company Contribution Account shall be
forfeited.
(B) RESTORATION OF FORFEITED AMOUNTS IN THE EVENT OF REHIRE. In the
case of a Member who suffers a forfeiture under this Section, the
forfeited amount shall be restored to the Member's Accounts if the
Member again becomes an Employee of the Company before the expiration
of 5 Breaks in Service. In the case of a Deferred Member who suffers a
forfeiture under this Section or under the Pre-Distribution ITT Plan,
the forfeited amount shall, provided such Deferred Member again becomes
an Employee of the Company before the expiration of 5 Breaks in
Service, be restored to his or her Accounts at its current value
assuming such amount, from the time of termination to the date of
restoration, was subject to the same overall investment experience as
the Member's Matching Company Contributions or Member Matching
Allocations while he or she was a Deferred Member. Any restoration of
forfeited amounts under this paragraph shall be made as of the
Valuation Date following the date the Plan Administrator receives
notice of the reemployment. The extent to which the Member vests in
amounts restored under this Section shall be determined in accordance
with the vesting schedule in this Article Five.
(C) USE OF FORFEITED AMOUNTS TO REDUCE FUTURE COMPANY CONTRIBUTIONS. As
soon as practicable after the occurrence of a forfeiture described in
the preceding paragraph, the forfeited amount shall be applied to
reduce future Company contributions under the Plan.
(D) CREDITING OF FORFEITED AMOUNTS TO ACCOUNTS IN CERTAIN
CIRCUMSTANCES. In the event of the termination of the Plan or complete
discontinuance of Company contributions hereunder, any forfeitures not
previously applied in accordance with the preceding paragraph shall be
credited proportionately to the Accounts of all Members and Deferred
Members as described in Article Seventeen.
5.5 ADDITIONAL COMPANY CONTRIBUTIONS IF PLAN IS TOP-HEAVY.
(A) ADDITIONAL CONTRIBUTION. For any Plan Year with respect to which
the Plan is Top-Heavy (as defined in the next paragraph), an additional
Company contribution shall be allocated on behalf of each Member (or
each Employee eligible to become a Member) who is not a "key employee,"
and who has not separated from service as of the last day of the Plan
Year, to the extent that the amounts allocated to his or her Accounts
as a result of contributions made under Sections 5.1 and 5.2 for that
Plan Year are less than 3% of his or her W-2 remuneration for that Plan
Year. However, if the greatest percentage of W-2 remuneration for that
Plan Year (after being limited to the annually indexed dollar amount
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<PAGE> 25
under Code Section 401(a)(17)) contributed by a "key employee" under
Section 4.1 or allocated to his or her Accounts as a result of
contributions made pursuant to Section 5.1 for the Plan Year would be
less than 3%, such lesser percentage shall be substituted for "3%" in
the preceding sentence. Notwithstanding the foregoing, no minimum
contribution shall be made with respect to a Member if the required
minimum benefit under Code Section 416(c)(1) is provided by the
Hartford Fire Insurance Company Retirement Plan for U.S. Employees.
(B) DEFINITION OF TOP-HEAVY PLAN. The Plan shall be considered
Top-Heavy with respect to any Plan Year, if, as of the last day of the
preceding Plan Year, the value of the aggregate of the Accounts under
the Plan for "key employees" exceeds 60 percent of the value of the
aggregate of the Accounts under the Plan for all Employees. The value
of such Accounts shall be determined as of the Valuation Date on or
before the last day of such preceding Plan Year, in accordance with
Code Sections 416(g)(3) and (4) and Article Seven of this Plan. Also,
account balances under the Plan will be combined with the account
balances or the present value of accrued benefits under any other
qualified plan of the Company and its affiliates in which "key
employees" participate or which enable the Plan to meet the
requirements of Code Section 401(a)(4) or 410, and (at the Company's
discretion) may be combined with the account balances or the present
value of accrued benefits under any other qualified plan of the Company
or its affiliates in which all members are non-key employees, if the
contributions or benefits under the other plan are at least comparable
to the benefits provided under this Plan. The determination as to
whether an Employee will be considered a "key employee" shall be made
in accordance with the provisions of Code Sections 416(i)(l) and (5),
and on the basis of the Employee's Form W-2 remuneration for the
applicable Plan Year from the Company, or an affiliate of the Company
(if applicable).
5.6 MINIMUM COMPANY CONTRIBUTION.
(A) MAKING OF MINIMUM COMPANY CONTRIBUTION. For each Plan Year,
Hartford Fire and/or Hartford Life and Accident Insurance Company
(collectively, for purposes of Sections this Section 5.6, the
"Contributing Companies") may make contributions to the Plan in the
form of employer contributions (within the meaning of Code Section
404), in cash or stock, at least equal to a specified minimum dollar
amount, on behalf of those individuals who are entitled to an
allocation under this Section 5.6 (the "Minimum Company Contribution").
Such amount, if any, shall be determined by the Chief Financial Officer
or other delegatee of the Contributing Companies by appropriate
resolution on or before the last day of the taxable year of the
Contributing Companies that ends within such Plan Year.
(B) TIMING AND DEDUCTION OF MINIMUM COMPANY CONTRIBUTION. The Minimum
Company Contribution for a Plan Year shall be paid by the Contributing
Companies in one or more installments without interest and at any time
during the Plan Year. For purposes of deducting such amount, the
Contributing Companies shall make any Minimum Company Contribution, not
later than the time prescribed by the Code for filing their income tax
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<PAGE> 26
returns including extensions, for their respective taxable years that
end within such Plan Year. Notwithstanding any provision of the Plan to
the contrary, such Minimum Company Contribution Plan shall not revert
to, or be returned to, the Contributing Companies.
(C) ALLOCATION OF MINIMUM COMPANY CONTRIBUTION. Any Minimum Company
Contribution made by the Contributing Companies for the Plan Year shall
be allocated to the Employees of the entity making such contribution in
the order and the manner described below.
(i) FIRST, the Minimum Company Contribution for the Plan Year
shall be allocated during the Plan Year to each individual who
is a Member on the first day of the Plan Year as Basic
Before-Tax Savings and Supplemental Before-Tax Savings
pursuant to Article Four and as Matching Company Contributions
under Article Five. These allocations will be to the Basic
Before-Tax Investment Account, Supplemental Before-Tax
Investment Account and Company Contribution Account of each
such Member, as appropriate.
(ii) SECOND, the balance of the Minimum Company Contributions
remaining after the allocation in the preceding paragraph
shall be allocated to the Company Contribution Account of each
Member who is not a Highly Compensated Employee who is a
Member on the first day of the Plan Year and who is employed
on the last day of the Plan Year, in the ratio that such
Member's Before-Tax Savings during the Plan Year bears to the
Before-Tax Savings of all such Members during the Plan Year.
Any amount allocated to the Company Contribution Account of a
Member pursuant to this paragraph shall be treated in the same
manner as Matching Company Contributions for all purposes of
the Plan.
(iii) THIRD, notwithstanding Section 6.4 of the Plan, if the
total contributions allocated to a Member's Account including
the Minimum Company Contribution exceeds the Member's maximum
annual addition limit for any Limitation Year, then such
excess shall be held in a suspense account. Such amounts shall
be used to reduce employer contributions in the next, and
succeeding, Plan Years.
(iv) FOURTH, the balance of the Minimum Company Contribution
remaining after the allocation under the three preceding
paragraphs shall be allocated as nonelective contributions to
each Member who is not a Highly Compensated Employee and who
is a Member on the first day of the Plan Year, in the ratio
that such Member's Salary for the Plan Year bears to the
Salary for the Plan Year of all such Members. A separate
account will be established for contributions made under this
paragraph. Contributions made under this paragraph shall be
subject to the vesting schedule in this Article Five. Such
contributions shall be invested under the Plan in the manner
designated by the Member.
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<PAGE> 27
(D) HOLDING OF MINIMUM COMPANY CONTRIBUTION IN SUSPENSE ACCOUNT. Each
installment of the Minimum Company Contribution shall be held in a
contribution suspense account unless, or until, allocated on or before
the end of the Plan Year in accordance with this Section 5.6(C). Such
suspense account shall not participate in the allocation of investment
gains, losses, income and deductions of the Trust Fund as a whole, but
shall be invested separately and all gains, losses, income and
deductions attributable to such investment shall be applied to reduce
Plan expenses, and thereafter, to reduce employer contributions.
(E) NO DOUBLE ALLOCATION. Notwithstanding any of the foregoing
provisions to the contrary, any allocation of Before-Tax Savings to a
Member's Account shall be made under either Section 4.1 or this Section
5.6, but not both Sections. Similarly, any allocation of a Matching
Company Contribution to a Member's Account shall be made under either
Section 5.1 or this Section 5.6, as appropriate, but not both Sections.
ARTICLE SIX
IRS LIMITS ON MEMBER SAVINGS
AND COMPANY CONTRIBUTIONS
6.1 IRS LIMITS ON BEFORE-TAX SAVINGS.
(A) MAXIMUM AMOUNT OF BEFORE-TAX SAVINGS. The maximum dollar amount of
Before-Tax Savings that may be made on behalf of any Member for a
calendar year shall be the maximum amount determined by the Secretary
of the Treasury, pursuant to Section 402(g) of the Code. In the event
that the foregoing limitation is exceeded for any calendar year, the
excess Before-Tax Savings as adjusted for investment experience will,
in the sole discretion of the Plan Administrator, either (i) be deemed
to have been distributed to the Member and recontributed to the Plan as
After-Tax Savings, or (ii) be returned to the Member on behalf of whom
such Before-Tax Savings were contributed. Any returned amounts will be
returned no later than April 15 following the end of the calendar year
that the contributions were made. However, if the Member participated
in more than one qualified defined contribution plan to which he or she
contributed pursuant to a Salary deferral arrangement, the Member shall
notify the Plan Administrator by March 1 of the following calendar year
of the amount of the excess deferrals to be allocated to this Plan, and
such portion of the excess deferrals so allocated shall be
recontributed to the Plan as After-Tax Savings or returned to the
Member as provided in the preceding sentence.
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<PAGE> 28
Notwithstanding the foregoing, in the case of any Member who (a) ceases
to be an Employee during a Plan Year, (b) is employed during such Plan
Year by an employer which is not the Company or an entity within the
controlled group of corporations (as defined in Code Section 414(b) and
the Regulations thereunder) containing the Company, and (c) exceeds the
limitation on elective deferrals enumerated in Code Section 402(g)
based on the Member's participation in the Plan and participation in a
plan maintained by the subsequent employer, the Plan shall not
distribute to such a Member any Before-Tax Savings (or any income
thereon) that arise solely as a result of the Member exceeding the Code
Section 402(g) limit for the Plan Year, unless such limit was exceeded
solely because of the Member's participation in this Plan, without
considering any other plan.
(B) LIMIT ON BEFORE-TAX SAVINGS FOR HIGHLY COMPENSATED MEMBERS. With
respect to each Plan Year, the Actual Deferral Percentage for Highly
Compensated Members shall not exceed the greater of: (i) 125 percent of
the prior year's Actual Deferral Percentage for all other Members, or
(ii) the lesser of (a) 200 percent of the prior year's Actual Deferral
Percentage of all other Members or (b) the prior year's Actual Deferral
Percentage of all other Members plus 2 percentage points. Before-Tax
Savings must have been allocated to Members' Accounts during the Plan
Year and may only be based on Salary received by a Member during the
Plan Year or earned during the Plan Year and received by the Member
within 2-1/2 months after the end of the Plan Year. In the event the
Actual Deferral Percentage for Highly Compensated Employees for any
Plan Year exceeds the limits described above, such amount of excess
deferrals, determined by reducing contributions made on behalf of
Highly Compensated Employees on the basis of the amount of
contributions made on behalf of such Highly Compensated Employees, as
adjusted for investment experience, will be distributed to the Members
on whose behalf of such deferrals were made or, under rules to be
adopted by the Committee, such Members may elect to recharacterize such
adjusted deferrals as After-Tax Savings. Any such recharacterization
or distribution of the adjusted excess deferrals will be made to the
Highly Compensated Employees on the basis of the respective portion of
the adjusted excess deferrals attributable to each of such Employees
and the recharacterization or the distribution of the adjusted excess
deferrals will be made to the Employees on whose behalf such
contributions were made within 2-1/2 months following the end of the
Plan Year for which the deferrals were made.
In the event that any portion of a Member's Before-Tax Savings, as
adjusted for investment experience, is returned or recharacterized
pursuant to Section 6.1(A) as a result of the maximum dollar limit
applicable to Before-Tax Savings, such Member's Average Deferral
Percentage shall be determined before such excess deferral is returned.
Any such adjusted excess deferrals that are recharacterized shall be
treated as (I) annual additions pursuant to Section 6.4 and (II)
Before-Tax Savings for purposes of their withdrawability prior to
Termination of Employment and shall be subject to the financial
hardship requirement provisions of Section 10.2.
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<PAGE> 29
For purposes of determining the Actual Deferral Percentage for Highly
Compensated Employees, all contributions made by Highly Compensated
Employees to qualified plans shall be aggregated. The contributions of
all Employees under plans that are aggregated with this Plan for
purposes of Section 401(a) or 410(b) of the Code shall be aggregated
and deemed to have been made under a single plan.
For Plan Years commencing before 1997, in determining the Actual
Deferral Percentage of Highly Compensated Employees, the Highly
Compensated Employee's Before-Tax Savings and Compensation shall
include the Before-Tax Savings and Compensation of family members (as
defined in Section 414(q)(6) of the Code). In the event that
recharacterization or distribution of excess deferrals is required,
appropriate adjustment shall be made for all family members as provided
in the Code.
(C) ADDITIONAL LIMITS ON BEFORE-TAX SAVINGS. From time to time and in
order to comply with Section 401(k)(3) of the Code, the Plan
Administrator may impose a limitation on the extent to which a Highly
Compensated Member may contribute Before-Tax Savings hereunder, based
on a reasonable projection of savings rates of non- Highly Compensated
Members.
6.2 IRS LIMITS ON AFTER-TAX SAVINGS.
(A) LIMIT ON AFTER-TAX SAVINGS FOR HIGHLY COMPENSATED MEMBERS. With
respect to each Plan Year, the Actual Contribution Percentage for
Highly Compensated Members shall not exceed the greater of (i) 125
percent of the prior year's Actual Contribution Percentage for all
other Members or (ii) the lesser of (a) 200 percent of the prior year's
Actual Contribution Percentage of all other Members or (b) the prior
year's Actual Contribution Percentage of all other Members plus 2
percentage points. In the event the Actual Contribution Percentage for
Highly Compensated Members for any Plan Year exceeds the limits
described above, such amount of excess contributions determined by
reducing contributions made on behalf of Highly Compensated Members on
the basis of the amount of contributions made on behalf of such Highly
Compensated Members, as adjusted for investment experience, will be
returned to, or paid to, the Members for whom such contributions were
made within 2-1/2 months following the end of the Plan Year for which
the contributions were made. To the extent contributions must be paid
or returned to a Member under the preceding sentence, the distribution
shall be made from the following categories of contributions (adjusted
to reflect earnings or losses attributable thereto): First,
Supplemental After-Tax Savings; second, Basic After-Tax Savings (to the
extent that associated Matching Company Contributions are vested, they
also shall be distributed in this category); third, remaining vested
Matching Company Contributions. To the extent that an additional
adjustment is required, nonvested Matching Company Contributions shall
be forfeited.
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<PAGE> 30
For purposes of determining the Actual Contribution Percentage for
Highly Compensated Members, all contributions made by them to qualified
plans shall be aggregated. The contributions of all Employees under
plans that are aggregated with this Plan for purposes of Code Section
401(a) or 410(b) shall be aggregated and deemed to have been made under
a single plan.
A Members' Actual Contribution Percentage shall be determined after a
Member's excess Before-Tax Savings are either recontributed to the Plan
as After-Tax Savings or paid to the Member.
For Plan Years commencing before 1997, in determining the Actual
Contribution Percentage of Highly Compensated Members, their After-Tax
Savings and Compensation shall include the After-Tax Savings and
Compensation of family members (as defined in Section 414(q)(6) of the
Code). In the event that distribution of excess contributions is
required, appropriate adjustment shall be made for all family members
as provided in the Code.
(B) ADDITIONAL LIMITS ON AFTER-TAX SAVINGS. From time to time and in
order to comply with Code Section 401(m) of the Code, the Plan
Administrator may impose an additional limit on the amount of After-Tax
Savings that a Highly Compensated Member may contribute to the Trust
Fund, based on a reasonable projection of savings rates of non-Highly
Compensated Members.
6.3 AGGREGATE LIMIT ON BEFORE-TAX SAVINGS AND AFTER-TAX SAVINGS BY HIGHLY
COMPENSATED MEMBERS. Notwithstanding the provisions of Section 6.1(B) and
Section 6.2(A) above, in no event shall the sum of the Actual Deferral
Percentage of the group of eligible Highly Compensated Employees and the Actual
Contribution Percentage of such group, after applying such provisions, exceed
the "aggregate limit" as such term is defined under regulations prescribed by
the Secretary of the Treasury under Code Section 401(m). In the event that such
limit is exceeded for any Plan Year, the Actual Contribution Percentages of the
Highly Compensated Members shall be reduced to the extent necessary to satisfy
such limit in accordance with Section 6.2(A) above.
6.4 ANNUAL LIMITS ON ADDITIONS TO MEMBER ACCOUNTS.
(A) DEFINITIONS. For purposes of this Section 6.4, the following
definitions shall apply:
(i) DEFINITION OF "ANNUAL ADDITION." The "Annual Addition" to
a Member's Accounts for any Limitation Year beginning with
1996 means the sum of (a) the Member's Before-Tax Savings for
such Year, (b) the Member's After-Tax Savings for such Year,
(c) all Matching Company Contributions and Floor Company
Contributions by the Company or an Affiliate for the Member
for such Year, and (d) the amount of any forfeiture restored
to the Member's Company Contribution Account for such Year
under Section 5.4.
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<PAGE> 31
(ii) DEFINITION OF "AFFILIATE." The term "Affiliate" means any
subsidiary or affiliate within the Company's controlled group
of companies, as determined under Code Section 414, except
that the phrase "more than 50 percent" shall be substituted
for the phrase "at least 80 percent" where it appears in Code
Section 1563(a)(1).
(B) MAXIMUM ANNUAL ADDITION FOR THIS PLAN. Notwithstanding any
provision of this Plan to the contrary, except as otherwise provided in
this Article Six, the Annual Addition to a Member's Accounts under the
Plan for any Limitation Year, when added to the Member's Annual
Addition for that Limitation Year under any other qualified defined
contribution plan of the Company or any Affiliate of the Company, shall
not exceed the Maximum Annual Addition. The Maximum Annual Addition
shall be the lesser of (i) 25% of the Member's aggregate Compensation
for that Limitation Year, or (ii) $30,000. As of January 1 of each
Limitation Year, this $30,000 limit shall be adjusted upward to the
extent that the Internal Revenue Service increases such amount to
reflect increases in the cost of living.
(i) CONSEQUENCES OF EXCEEDING MAXIMUM ANNUAL ADDITION. In the
event of a determination that the Annual Addition to a
Member's Accounts for any Limitation Year would exceed the
Maximum Annual Addition, such Annual Addition shall be reduced
to the extent necessary to bring it within the Maximum Annual
Addition. Such Member's Matching Company Contributions and/or
Floor Company Contributions for such Limitation Year shall be
reduced and reallocated to the other Members in the Plan, in
the proportion that the Salary of each such other Member bears
to the total Salaries for all such other Members for such Year
(to the extent permitted by the Plan).
(C) MAXIMUM ANNUAL ADDITION FOR MEMBERS PARTICIPATING IN OTHER DEFINED
CONTRIBUTION PLANS. In the event that a Member is a participant in any
other defined contribution plans (whether or not terminated) of the
Company or an Affiliate, the total amount added to such Member's
Accounts under this Plan and all such other plans in any Limitation
Year shall not exceed the Maximum Annual Addition. In the event of a
determination that such total amount would exceed the Maximum Annual
Addition, the amounts added to such Member's Accounts shall be reduced
as follows:
(i) FIRST, the annual additions to the Member's Accounts under
such other defined contribution plans shall be reduced to the
extent necessary and to the extent permitted by law so that
the Maximum Annual Addition for this Plan is not exceeded; and
(ii) SECOND, if after application of the preceding paragraph
the amounts added to the Member's Accounts would still exceed
the Maximum Annual Addition, then the Annual Addition to the
Member's Accounts under this Plan shall be reduced.
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(D) MAXIMUM ANNUAL ADDITION FOR MEMBERS PARTICIPATING IN DEFINED
BENEFIT PLANS. In the event that a Member is a participant in any
defined benefit plan maintained by the Company or an Affiliate, it is
intended that the benefits under such defined benefit plan shall be
reduced before applying the Maximum Annual Addition for this Plan, to
the extent required to meet the requirements of Code Section 415(e) for
Limitation Years beginning before January 1, 2000.
ARTICLE SEVEN
CREDITS TO ACCOUNTS;
ASSET VALUATION AND ALLOCATION
7.1 ESTABLISHMENT OF ACCOUNTS. The Accounts described below shall be established
for Members and Deferred Members, as appropriate, to hold contributions under
the Plan and earnings thereon:
<TABLE>
<CAPTION>
TYPE OF CONTRIBUTION SUB-ACCOUNT ACCOUNT
- -------------------- ----------- -------
<S> <C> <C>
- -Basic Before-Tax Savings Basic Before-Tax Investment Account } Basic Investment Account
- -Basic After-Tax Savings Basic After-Tax Investment Account }
Supplemental
- -Supplemental Before-Tax Savings Supplemental Before-Tax Investment Account Investment Account
- -Supplemental After-Tax Savings Supplemental After-Tax Investment Account
- -Prior Plan Transfers
} Rollover Account
- -Rollovers
- -Matching Company Contributions Company Contribution
(including pre-Distribution ITT type) Account
- -Floor Company Contributions
- -Prior Plan Transfers ESOP Account
ESOP balances
</TABLE>
7.2 CREDITING OF CONTRIBUTIONS TO ACCOUNTS. Member Savings, Rollovers and
Company Contributions shall be credited to the appropriate Account as soon as
practicable after they are transferred to the Trust Fund.
7.3 METHOD OF DETERMINING VALUE OF AMOUNTS CREDITED TO ACCOUNTS. At the end of
each business day in which the Plan is in effect and operation, the amount of
credit of a Member or Deferred Member in each of the funds shall be expressed
and credited to the Accounts of such Member or Deferred Member using the unit
accounting method, a method of participant accounting
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under which all balances are carried as "units," which are multiplied by a unit
value to give the actual cash value. For purposes of Article Eight, the interest
of a Member or Deferred Member in The Hartford Company Stock Fund and The
Hartford Life Company Stock Fund shall be converted into a number of shares of
The Hartford Stock or Hartford Life Stock, respectively, as of any particular
time, by dividing the value of all shares of Stock in the applicable Fund by the
value of the interest of the Member or Deferred Member in the Fund at such time.
The resulting number of shares of Stock shall be deemed allocated to such
Member.
7.4 VALUATION OF THE HARTFORD AND HARTFORD LIFE STOCK. For the purpose of
determining the value of The Hartford Stock or Hartford Life Stock hereunder, in
the event such Stock is traded on a national securities exchange, such Stock
shall be valued at the closing price of such Stock on the New York Stock
Exchange composite tape on the business day such Stock is delivered to the
Trustee. In the event such Stock is not traded on a national securities
exchange, such Stock shall be valued in good faith by an independent appraiser
selected by the Trustee and meeting requirements similar to those in the
regulations prescribed under Code Section 170(a)(1).
7.5 ASSET VALUATION; ALLOCATION OF GAINS AND LOSSES. At the end of each business
day, the Trustee shall (A) determine the total fair market value of all assets
then held by it in each Investment Fund, (B) determine the gain or loss in the
value of such assets, and (C) allocate such gain or loss pro rata by fund to the
balances credited to the Accounts of all Members and Deferred Members as of such
day.
ARTICLE EIGHT
INVESTMENT OF SAVINGS AND CONTRIBUTIONS IN INVESTMENT FUNDS
8.1 APPROVAL OF INVESTMENT FUNDS FOR THE PLAN. Contributions to the Plan shall
be invested by the Trustee in the Investment Funds approved by the Pension Fund
Trust and Investment Committee from time to time. The Pension Fund Trust and
Investment Committee, or such other Committee or individual as may be designated
by the Board of Directors, may from time to time add Investment Funds to, or
eliminate Investment Funds from, the group of Investment Funds available
hereunder. Notwithstanding the foregoing, the Trustee temporarily may hold cash
or make short-term investments in obligations of the United States Government,
commercial paper, an interim investment fund for tax-qualified employee benefit
plans established by the Trustee, or other investments of a short-term nature,
unless otherwise provided by applicable law.
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8.2 TRUSTEE INVESTMENT OF CONTRIBUTIONS IN INVESTMENT FUNDS. Contributions to
the Plan shall be invested by the Trustee in the Investment Funds as described
below. An account shall be established for each Member and Deferred Member in
each Investment Fund as to which Savings, Rollovers, Company Contributions and
ESOP balances are made, contributed, or otherwise properly allocated.
(A) SAVINGS AND ROLLOVERS. Member and Deferred Member Savings and
Rollovers shall be invested in multiples of 1% in one or more of the
Investment Funds, as properly elected by the Member or Deferred Member.
(B) COMPANY CONTRIBUTIONS AND ESOP ACCOUNT BALANCES.
(i) HARTFORD FIRE MEMBERS AND DEFERRED MEMBERS. For a Hartford
Fire Member or a Hartford Fire Deferred Member, Company
Contributions and ESOP Account balances shall be invested as
of the Principal Employment Date entirely in The Hartford
Company Stock Fund, except to the extent that such Hartford
Fire Member or Hartford Fire Deferred Member (a) declined to
make or derives rights from a person who declined to make a
transfer permitted by Section 8.3(E), or (b) makes or derives
rights from a person who made an election at age 55 under
Section 8.3(D).
(ii) HARTFORD LIFE MEMBERS AND DEFERRED MEMBERS. For a
Hartford Life Member or a Hartford Life Deferred Member,
Company Contributions and ESOP Account balances shall be
invested as of the later of the Principal Employment Date or
the Transfer Opening Date entirely in The Hartford Life
Company Stock Fund, except to the extent that such Hartford
Life Member or Hartford Life Deferred Member (a) declined to
make or derives rights from a person who declined to make a
transfer permitted by Section 8.3(E), or (b) makes or derives
rights from a person who made an election at age 55 under
Section 8.3(D).
8.3 CHANGES IN INVESTMENT ELECTIONS.
(A) GENERAL RULES. A Member or Deferred Member may make changes to his
or her investment elections and transfer amounts between Investment
Funds to the extent permitted by this Section 8.3. Such changes and
transfers may be made by giving notice to the Company in a manner and
by the date required by the Plan Administrator. The effective date of
any such change or transfer shall be the next payroll period (or as
soon as administrative practicable thereafter). All changes and
transfers shall be made in multiples of 1%.
(B) CHANGE OF INVESTMENT FUNDS FOR FUTURE SAVINGS AND ROLLOVERS. A
Member may elect to change the Investment Funds in which his or her
future Savings and Rollovers shall be invested, in accordance with the
rules described in the preceding paragraph.
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<PAGE> 35
(C) REDISTRIBUTION AMONG INVESTMENT FUNDS FOR PAST SAVINGS AND
ROLLOVERS. A Member or Deferred Member may elect to redistribute his or
her past Savings and Rollovers among any of the Investment Funds, in
accordance with the rules of Section 8.3(A), except that (i) no amounts
shall be transferred from the Stable Value Fund to the Money Market
Fund or the Bond Income Strategy Fund, and (ii) a Member or Deferred
Member who transfers amounts from the Stable Value Fund to another
Investment Fund cannot, for a period of three months, transfer any
amounts to the Money Market Fund or the Bond Income Strategy Fund.
(D) AGE 55 OPTION: CHANGES / REDISTRIBUTIONS FOR COMPANY CONTRIBUTIONS
AND ESOP ACCOUNT BALANCES.
(i) MEMBER CHANGE OF INVESTMENT FUNDS FOR FUTURE COMPANY
CONTRIBUTIONS. A Member who has reached age 55 may elect to
change the Investment Funds in which future Matching Company
Contributions and Floor Company Contributions shall be
invested, in accordance with the rules of Section 8.3(A).
(ii) MEMBER REDISTRIBUTION AMONG INVESTMENT FUNDS FOR PAST
COMPANY CONTRIBUTIONS AND ESOP ACCOUNT BALANCES. A Member who
has reached age 55 may elect to redistribute his or past
Company Contributions and ESOP Account balances among any of
the Investment Funds, in accordance with the rules of this
Section 8.3(A), and subject to the restrictions described in
Section 8.3(C).
(iii) REDISTRIBUTION BY CERTAIN DEFERRED MEMBERS. The
following Deferred Members may also elect to make a
redistribution described in the preceding paragraph: (a) a
Deferred Member whose employment with Pre-Distribution ITT or
Hartford Fire terminated on or after July 1, 1989 who has
attained age 55, (b) a spouse Beneficiary of a Member who died
on or after July 1, 1989, such election to be made after such
spouse has attained age 55 or such Member would have attained
age 55, and (c) an Alternate Payee under a domestic relations
order that was qualified on or after October 1, 1993 who has
attained age 55.
(E) TRANSFER OF PAST COMPANY CONTRIBUTIONS BETWEEN COMPANY STOCK FUNDS.
(i) HARTFORD FIRE MEMBER TRANSFER OF ACCOUNTS TO THE HARTFORD
COMPANY STOCK FUND. A Hartford Fire Member shall be entitled
as of the Principal Employment Date, and shall continue to be
so entitled until the termination of such principal
employment, to transfer to The Hartford Company Stock Fund the
entire balance of his or her Company Contribution Account and
ESOP Account, if any, invested in The Hartford Life Company
Stock Fund.
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(ii) HARTFORD LIFE MEMBER TRANSFER OF ACCOUNTS TO THE HARTFORD
LIFE COMPANY STOCK FUND. A Hartford Life Member shall be
entitled, as of the later of (a) the Principal Employment
Date, or (b) the Transfer Opening Date, and shall continue to
be so entitled until the termination of such principal
employment, to transfer to the Hartford Life Company Stock
Fund the entire balance of his or her Company Contribution
Account and ESOP Account, if any, invested in The Hartford
Company Stock Fund.
8.4 TRUSTEE USE OF COMPANY CASH CONTRIBUTIONS. In general, the trustee shall use
Company cash contributions for Hartford Fire Members and Hartford Life Members
to acquire The Hartford Stock and Hartford Life Stock, respectively. Such Stock
may be purchased from any source. Such Stock purchased from The Hartford or
Hartford Life may be treasury shares or newly issued shares or authorized but
unissued shares; provided however, that in no event shall a commission be
charged with respect to such a purchase. Alternatively, the Trustee in its
discretion may hold such amounts in cash, consistent with its obligations as
Trustee, as it deems advisable in accordance with the provisions of the trust
agreement.
8.5 MEMBER VOTING OF THE HARTFORD STOCK AND HARTFORD LIFE STOCK. Each Member,
Deferred Member and Beneficiary is for the purposes of this Section hereby
designated a named fiduciary within the meaning of Section 402(a)(2) of ERISA
with respect to any shares of The Hartford Stock or Hartford Life Stock
allocated to their respective Accounts, and may direct the Trustee as to the
manner in which such Stock is to be voted. Before each annual or special meeting
of shareholders of The Hartford or Hartford Life, there shall be sent to each
such person a copy of the proxy solicitation material for such meeting, together
with a form requesting instructions to the Trustee on how to vote such Stock.
Upon receipt of such instructions, the Trustee shall vote such Stock as
instructed. In lieu of voting fractional shares of such Stock as so instructed,
the Trustee may vote the combined fractional shares of such Stock to the extent
possible to reflect the directions of the Members, Deferred Members and
Beneficiaries with allocated fractional shares of each class of such Stock. The
Trustee shall vote shares of such Stock allocated to Accounts under the Plan,
for which no valid voting instructions were received, in the same manner and in
the same proportion that the shares of The Hartford Stock and Hartford Life with
respect to which the Trustee received valid voting instructions are voted.
Instructions to the Trustee shall be in such form and pursuant to such
regulations as the Plan Administrator may prescribe. Any instructions received
by the Trustee regarding the voting of The Hartford Stock and Hartford Life
Stock shall be confidential and shall not be divulged by the Trustee to the
Company, or to any director, officer, employee or agent of the Company, it being
the intent of this Section to ensure that the Company (and its directors,
officers, employees and agents) cannot determine the voting instructions given
by any person.
8.6 PROCEDURES IN THE EVENT OF A TENDER OFFER FOR THE HARTFORD OR HARTFORD LIFE
STOCK. The provisions of this Section shall apply in the event any person,
either alone or in conjunction with others, makes a tender offer, makes an
exchange offer, or otherwise offers to purchase or solicits an offer to sell to
such person one percent or more of the outstanding shares of a class of The
Hartford Stock or Hartford Life Stock held by a Trustee hereunder (herein
jointly and severally referred to
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as a Tender Offer). As to any Tender Offer, each Member and Deferred Member (or
Beneficiary in the event of the death of the Member or Deferred Member) shall
have the right to determine confidentially whether shares held subject to the
Plan will be tendered.
(A) INSTRUCTIONS TO TRUSTEE. In the event a Tender Offer is commenced,
the Plan Committee, promptly after receiving notice of such
commencement, shall transfer certain of its record keeping functions to
an independent record keeper. The functions so transferred shall be
those necessary to preserve the confidentiality of any directions given
by the Members and Deferred Members (or Beneficiary in the event of the
death of the Member or Deferred Member) in connection with the Tender
Offer. A trustee may not take any action in response to a Tender Offer
except as otherwise provided in this Section. Each Member is, for all
purposes of this Section, hereby designated a named fiduciary within
the meaning of Section 402(a)(2) of the ERISA, with respect to the
shares of The Hartford Stock or Hartford Life Stock allocated to his or
her Accounts. Each Member and Deferred Member (or Beneficiary in the
event of the death of the Member or Deferred Member) may direct the
Trustee to sell, offer to sell, exchange or otherwise dispose of The
Hartford Stock or Hartford Life Stock allocated to any such
individual's Accounts in accordance with the provisions, conditions and
terms of such tender offer and the provisions of this Section,
provided, however, that such directions shall be confidential and shall
not be divulged by the Trustee or independent record keeper to the
Company or to any director, officer, employee or agent of the Company,
it being the intent to ensure that the Company (and its directors,
officers, employees and agents) cannot determine the direction given by
any Member, Deferred Member or Beneficiary. Such instructions shall be
in such form and shall be filed in such manner and at such time as the
Trustee may prescribe.
(B) TRUSTEE ACTION ON MEMBER INSTRUCTIONS. The Trustee shall sell,
offer to sell, exchange or otherwise dispose of The Hartford Stock or
Hartford Life Stock allocated to the Member's, Deferred Member's or
Beneficiary's Accounts with respect to which it has received directions
to do so under this Section 8.6. The proceeds of a disposition directed
by a Member, Deferred Member or Beneficiary from his or her Accounts
under this Section 8.6 shall be allocated to such individual's Accounts
and be governed by the provisions of this Section or other applicable
provisions of the Plan and the trust agreements related hereto.
(C) TRUSTEE ACTION WITH RESPECT TO MEMBERS NOT ISSUING INSTRUCTING OR
ISSUING INVALID INSTRUCTIONS. To the extent to which Members, Deferred
Members and Beneficiaries do not issue valid directions to the Trustee
to sell, offer to sell, exchange or otherwise dispose of The Hartford
Stock or Hartford Life Stock allocated to their Accounts, such
individuals shall be deemed to have directed the Trustee that such
shares remain invested in The Hartford Stock or Hartford Life Stock
subject to all provisions of the Plan, including Section 8.6(D).
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(D) INVESTMENT OF PLAN ASSETS AFTER TENDER OFFER. To the extent
possible, the Trustee shall reinvest the proceeds of a disposition of
The Hartford Stock in an individual's Accounts in The Hartford Stock
and shall reinvest the proceeds of a disposition of Hartford Life Stock
in an individual's Accounts in Hartford Life Stock as expeditiously as
possible in the exercise of the Trustee's fiduciary responsibility and
shall otherwise be held by the Trustee subject to the provisions of the
trust agreement and the Plan. In the event that The Hartford Stock or
Hartford Life Stock is no longer available to be acquired following a
tender offer, the Company may direct the substitution of new employer
securities for such Stock or for the proceeds of any disposition of
such Stock. Pending the substitution of new employer securities or the
termination of the Plan and trust, the Trust Fund shall be invested in
such securities as the Trustee shall determine; provided, however,
that, pending such investment, the Trustee shall invest the cash
proceeds in short-term securities issued by the United States of
America or any agency or instrumentality thereof or any other
investments of a short-term nature, including corporate obligations or
participations therein and interim collective or common investment
funds.
ARTICLE NINE
MEMBER LOANS
BEFORE TERMINATION OF EMPLOYMENT
9.1 REQUEST FOR A LOAN; CONSEQUENCES OF REQUEST. At any time before Termination
of Employment, a Member may make a request, in a manner and by the date required
by the Plan Administrator, for a loan of a whole dollar amount from his or her
Accounts. By making such a request, the Member (A) specifies the amount and the
term of the loan, (B) agrees to the annual percentage rate of interest, (C)
agrees to the finance charge, (D) promises to repay the loan, and (E) authorizes
the Company to make regular payroll deductions to repay the loan. Loans will be
permitted only if all of the conditions described in the next paragraph are
satisfied. Permitted loans will be deducted from Member Accounts as of the Loan
Valuation Date, and will be paid in cash as soon as practicable thereafter.
Amounts so deducted will not participate in the investment experience of the
Plan.
9.2 CONDITIONS FOR TAKING A LOAN.
(A) MINIMUM LOAN AMOUNT. The loan must be at least $1,000, but cannot
exceed the lesser of: (a) 50% of the Member's Vested Share (determined
based on the most recent information available to the Plan
Administrator), or (b) $50,000 minus the Member's highest outstanding
loan balance (if any) during the preceding one year period.
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(B) ORDER OF SOURCES FOR LOANS. Loans can only be taken from the
Accounts listed in Section 9.3, and they must also be taken according
to the order of sources for loans listed in that Section, such that a
the full amount must be borrowed from each source on the list,
beginning with the first source on the list, before any amount may be
borrowed from the next source on the list (unless otherwise stated on
the list).
(C) REQUIRED TERM AND REPAYMENT SCHEDULE. The loan must be repaid no
less frequently than on a monthly basis over a period of twelve,
twenty-four, thirty-six, forty-eight or sixty months, except that a
Member who requests a loan to buy his or her own principal residence
may repay the loan over a period of seventy-two through one
hundred-eighty months, in twelve month increments. Extensions of loan
terms will not be permitted after a loan is made.
(D) MAXIMUM NUMBER OF LOANS. A Member may have no more than two loans
outstanding at any time.
(E) OTHER CONDITIONS. The Plan Administrator may make such additional
conditions or rules for taking loans as may be determined appropriate
in its sole discretion, which conditions shall be in writing and
communicated to Members. Such written conditions are incorporated
herein by reference.
9.3 ORDER OF SOURCES FOR LOANS.
(A) Basic Before-Tax and Supplemental Before-Tax Accounts.
(B) Basic After-Tax Investment Account.
(C) Supplemental After-Tax Investment Account (excluding any part of
the Account attributable to Prior Plan Transfers).
(D) Prior Plan Transfers.
(E) Rollover Account.
(F) ESOP Account.
(F) Floor Company Contributions in the Company Contribution Account.
(G) Vested Matching Company Contributions in the Company Contribution
Account.
9.4 INTEREST RATES FOR LOANS. The Plan Administrator shall establish and
communicate to Members a reasonable rate of interest for loans that it
determines to be commensurate with the interest rates charged by persons in the
business of lending money for loans similar circumstances,
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which interest rate shall remain in effect for the term of the loan. Such rate
shall be determined as follows: On the last business day of February, May,
August, and November of each Plan Year, the Plan Administrator shall determine
the prime rate published in the Wall Street Journal on that day, and then add 1%
to that prime rate (the "Applicable Interest Rate"). The Plan Administrator
shall then set the Plan loan interest rate for the next calendar quarter equal
to the Applicable Interest Rate.
9.5 OTHER REPAYMENT TERMS; PREPAYMENT. Loan repayments will be made to the
Accounts from which the loan was taken in reverse order, beginning with the last
source in Section 9.3 from which the loan was taken, and working backwards to
the first source. Repayments will be invested in the Investment Funds in
accordance with the Member's investment elections at the time of repayment. No
loan repayment will be credited with investment experience under the Plan until
the first business day after the month in which the repayment was made. The
entire outstanding balance of a loan may be prepaid at any time, with interest
through the date of prepayment. The date of prepayment will be the last business
day of the month in which the prepayment was made.
9.6 LOAN DEFAULT DURING EMPLOYMENT. Under certain circumstances, including, but
not limited to, the failure of a Member to make repayment of a loan for sixty
(60) days, or the impending bankruptcy of the Member, the Plan Administrator may
declare a Member's loan to be in default. In the event default is declared, the
outstanding loan balance and any accrued interest may be treated as a withdrawal
before Termination of Employment under Article Nine to the extent that the
Member is eligible to make such a withdrawal.
9.7 OUTSTANDING LOAN BALANCE AT TERMINATION OF EMPLOYMENT. Upon the Termination
of Employment of a Member with an outstanding loan balance, such balance shall
become due and payable and shall either be canceled or, if the Member so elects,
prepaid in full to his or her Accounts with interest to the date of prepayment.
Any prepayment must be made by the Valuation Date following Termination of
Employment or, if earlier, the Valuation Date that applies to the Member's
distribution or deferral election.
9.8 DEATH AFTER REQUEST FOR LOAN. If a Member requests a loan and dies after the
issuance of any check for any part of such loan, but before negotiation of such
check, then any unpaid part of the loan as represented by the non-negotiated
check will be paid to the Member's estate. If a Member requests a loan and dies
before the issuance of any check for any part of such loan, then the request for
the loan shall be null and void with respect to the part of the loan represented
by the check that was not issued. For purposes of this Section, a check will be
considered issued on the earlier of (i) the date of issuance shown on the check,
or (ii) the Loan Valuation Date.
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ARTICLE TEN
MEMBER WITHDRAWALS
BEFORE TERMINATION OF EMPLOYMENT
10.1 NON-HARDSHIP WITHDRAWALS.
(A) REQUEST FOR A NON-HARDSHIP WITHDRAWAL. At any time before
Termination of Employment, a Member may make a request, in a manner and
by the date required by the Plan Administrator, for a non-hardship
withdrawal of a dollar or percentage amount from his or her Accounts.
Non-hardship withdrawals will be permitted to the extent that the
conditions of Section 10.1(B) are satisfied. Permitted non-hardship
withdrawals will be deducted from a Member's Accounts as of the
Withdrawal Valuation Date, and will be paid in cash as soon as
practicable thereafter. Amounts so deducted will not participate in the
investment experience of the Plan. A Member who takes a non-hardship
withdrawal shall not be required to cease contributing Basic and
Supplemental Savings under the Plan.
(B) CONDITIONS FOR NON-HARDSHIP WITHDRAWALS.
(i) MINIMUM AMOUNT FOR WITHDRAWAL. The amount for withdrawal
must be at least $500.
(ii) PRORATION OF WITHDRAWAL AMONG ACCOUNTS. Withdrawals by
Members with Accounts in more than one Investment Fund must be
prorated among such Accounts based on their respective values.
(iii) ORDER OF SOURCES FOR WITHDRAWALS. Withdrawals can only
be taken with respect to all or a portion of the Accounts
listed in Section 10.1(C), and they must also be taken
according to the order of sources for withdrawals listed in
Section 10.1(C), such that the full amount must be withdrawn
from each source on the list, beginning with the first source
on the list, before any amount may be withdrawn from the next
source on the list (unless otherwise stated on the list).
(iv) OTHER CONDITIONS. The Plan Administrator may make such
additional conditions or rules for making non-hardship
withdrawals as may be determined appropriate in its sole
discretion, which conditions shall be in writing and
communicated to Members. Such written conditions are
incorporated herein by reference.
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(C) ORDER OF SOURCES FOR NON-HARDSHIP WITHDRAWALS.
(i) Supplemental After-Tax Investment Account
(ii) Rollover Account
(iii) Basic After-Tax Investment Account.
(iv) ESOP Account.
(v) Floor Company Contributions in the Company Contribution
Account, except that a Member who has completed less than 60
months of Service may only withdraw the Floor Company
Contributions that were made more than 24 months before the
proposed withdrawal date (and after withdrawing the available
amounts, such a Member may withdraw amounts from the source
described in the next paragraph).
(vi) Vested Matching Company Contributions in the Company
Contribution Account, except that a Member who has completed
less than 60 months of Service may only withdraw the Vested
Matching Company Contributions that were made more than 24
months before the proposed withdrawal date.
(D) NON-HARDSHIP WITHDRAWAL OF BEFORE-TAX SAVINGS AT AGE 591/2. A
Member who has reached age 59-1/2 may, without regard to financial
hardship, withdraw all or a portion of his or her Basic Before-Tax
Investment Account and Supplemental Before-Tax Investment Account.
10.2 HARDSHIP WITHDRAWALS
(A) ABILITY TO MAKE HARDSHIP WITHDRAWALS. Except as provided in
Appendix A, a Member who has not reached age 59-1/2 and who satisfies
all of the requirements of this Section 10.2 may make a hardship
withdrawal of all or a portion of his or her Supplemental Before-Tax
Investment Account, Basic Before-Tax Investment Account, and the amount
of his or her Company Contribution Account attributable to Prior Plan
Transfers, other than the portion of each such Account that represents
earnings credited to the Account after December 31, 1988. A Member who
has reached age 59-1/2 may withdraw all or a portion of the foregoing
Accounts without regard to financial hardship.
(B) BONA FIDE FINANCIAL HARDSHIP AND IMMEDIATE AND HEAVY FINANCIAL NEED
REQUIRED. A hardship withdrawal will not be permitted unless the Member
establishes to the satisfaction of the Hardship Committee that a bona
fide financial hardship exists. For this purpose, a bona fide financial
hardship means an immediate and heavy need to draw on financial
resources not reasonably available from other sources of the Member.
Bona fide financial hardships shall include (i) cash down payments
and/or closing costs associated with
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the purchase of a Member's principal residence, (ii) medical expenses
for a Member, spouse or dependents, (iii) expenses necessary for such
persons to obtain medical care that are not paid or reimbursed by
insurance, (iv) room and board expenses, tuition expenses and related
educational fees for post-secondary education for such persons for the
next academic year, (v) payments to prevent the eviction of a Member
from his or her principal residence or the foreclosure of a mortgage on
such residence, and (vi) any other reasons deemed appropriate by the
Hardship Committee. A Member may demonstrate lack of other reasonably
available financial resources by disclosing details of his or her
personal and family finances. Alternatively, the Hardship Committee may
deem that the Member has no other financial resources reasonably
available if (a) the Member agrees to suspend all Before-Tax Savings
and After-Tax Savings for a 12 month period as described in Article
Four, and (b) in the calendar year in which the Member may begin again
to contribute savings under the Plan, to have his or her maximum
permissible Before-Tax Savings reduced by any Before-Tax Savings
contributed during the previous calendar year. The Hardship Committee
shall make determinations of financial hardship in a uniform and
nondiscriminatory manner, with reference to all the relevant facts and
circumstances and in accordance with applicable tax law under Code
Section 401(k).
(D) WITHDRAWAL LIMITED TO FINANCIAL NEED (PLUS TAXES). The amount of a
hardship withdrawal cannot exceed the amount of the immediate and heavy
financial need demonstrated by the Member (plus applicable taxes on the
withdrawal). For this purpose, loans and amounts withdrawn from other
Accounts will be considered.
(E) ALL AVAILABLE LOANS AND DISTRIBUTIONS MUST BE TAKEN FIRST. A
hardship withdrawal will not be permitted unless the Member has
obtained (i) all distributions (other than hardship distributions)
available under all other retirement plans (including this Plan)
maintained by the Company, and (ii) all non-taxable loans available
under all retirement plans maintained by the Company, including this
Plan, provided that making the payments on such loans does not result
in a financial hardship for the Member.
10.3 PENALTY FOR MAKING WITHDRAWALS FROM CERTAIN ACCOUNTS. Matching Company
Contributions under Article 5 will be suspended for three months after the
applicable Withdrawal Valuation Date for any Member who has not reached age
59-1/2 and who makes a non-hardship or hardship withdrawal of any amount from
his or her Basic After-Tax Investment Account, or any amount of Vested Matching
Company Contributions from his or her Company Contribution Account.
10.4 DEATH AFTER REQUEST FOR WITHDRAWAL. If a Member dies after requesting a
withdrawal, payment of the withdrawn amounts will be made (or will not be made)
in accordance with the rules in Article Nine for death after a loan request.
10.5 DIRECT ROLLOVER OF WITHDRAWALS. Withdrawals may qualify as "eligible
rollover distributions" to the extent permitted by Article Eleven.
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ARTICLE ELEVEN
DISTRIBUTIONS FROM ACCOUNTS
11.1 TYPES OF DISTRIBUTIONS
(A) DISTRIBUTION OR DEFERRAL FOR MEMBERS UNDER AGE 70-1/2. Upon
Termination of Employment, a Member may request a distribution of the
value of his or her Vested Share. If a Member does not make such a
request, and the value of such Vested Share is less than $5,000, such
value will be paid to the Member in a single lump sum cash payment as
soon as practicable. If a Member does not make such a request, and the
value of the Member's Vested share is $5,000 or more, the Member shall
be deemed to request a deferral of the distribution of such Vested
Share until such time that the Member reaches age 70 1/2. Such a Member
automatically shall become a Deferred Member, and may request a
distribution of all or part of the Vested Share at any time before
reaching age 70-1/2 (subject to a minimum distribution amount of $500
for any partial distribution) in accordance with the Plan.
(B) DISTRIBUTIONS TO CERTAIN MEMBERS WHO HAVE REACHED AGE 70-1/2.
Effective January 1, 1998 or such later date as determined by the Plan
Administrator, except as provided below, a Member who reaches age
70-1/2 on or after January 1, 1997 is not required to commence
distribution of his or her Vested Share until Termination of his or her
Employment. However, such a Member may request a distribution of all or
part of such Vested Share at any time after reaching age 70-1/2
(subject to a minimum distribution amount of $500 for any partial
distribution). A Member who reaches age 70-1/2 on or after January 1,
1988 but before January 1, 1997 must have commenced distribution of his
or her Vested Share by no later than the April 1 following the year in
which he or she attains age 70-1/2. A Deferred Member or a Member who
is a "5 percent owner" as defined in Code Section 414(q)(1) and (3)
must commence distribution of his or her Vested Share by no later than
the April 1 following the year in which he or she reaches age 70-1/2.
The Vested Share of such Member shall be paid under the payment method
described in Section 11.6(A) below assuming the maximum allowable
number of payments based upon the Member's age, if permissible under
the terms of that payment method. If payment under the terms of that
payment method is not permissible, the Vested Share of the Member shall
be paid in an immediate lump sum. Alternatively, the Member may elect
that his or her Vested Share be paid under the payment method described
in Section 11.6(B) below, if permissible under the terms of that
payment method, or in an immediate lump sum. Payment of the Vested
Share of a Member who has reached age 70-1/2 pursuant to this Section
shall be made no less frequently than annually, and once such payment
has commenced, the Member may not elect an alternate method for payment
of such Vested Share while the Member is still an Employee.
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(C) DISTRIBUTION TO BENEFICIARY IN THE EVENT OF DEATH. Upon the death
of a Member or Deferred Member, the value of such Member's or Deferred
Member's Vested Share shall be distributed to his or her Beneficiary.
If the Member's or the Deferred Member's Beneficiary is not the spouse
of such Member or Deferred Member, the value of the Member's or
Deferred Member's Vested Share shall be distributed to the Beneficiary
within one year from the Member's or Deferred Member's date of death.
However, if the Member's or Deferred Member's Beneficiary is his or her
spouse and the value of the Vested Share to be distributed to the
spouse Beneficiary exceeds $5,000, such spouse Beneficiary may elect to
defer receipt of the Member's or Deferred Member's Vested Share until
the year in which the Member or Deferred Member would have reached age
70-1/2. If the value of the Vested Share to be distributed to a spouse
Beneficiary exceeds $5,000 and such spouse Beneficiary neither files
application for distribution of such Vested Share nor elects to defer
receipt of such Vested Share, then such spouse Beneficiary shall be
deemed to have deferred receipt of such Vested Share until the Member
or Deferred Member would have attained age 70 1/2. A spouse beneficiary
may, however, file application for distribution of all or part of such
Vested Share at any time prior to the year in which the Member or
Deferred Member would have attained age 70 1/2, subject to a minimum
distribution amount of $500 for any partial distribution.
11.2 MANNER OF REQUESTING DISTRIBUTION. All requests for any distributions
permitted by this Article Eleven shall be made in a manner and by the date
required by the Plan Administrator. No distribution will be made unless the
procedures prescribed by the Plan Administrator are properly followed.
11.3 VALUATION OF DISTRIBUTION. Distributions will be valued as of the date that
the Plan Administrator (or designee) receives a properly completed distribution
request, which date shall be treated as the Valuation Date that applies to the
distribution.
11.4 TIME OF DISTRIBUTION. All distributions will be paid to the appropriate
payee as soon as practicable following the applicable Valuation Date. If part of
a distribution is to be made in the form of stock, the stock will be distributed
after the cash part of the distribution.
11.5 FORM OF DISTRIBUTION. Except as otherwise provided in the Plan (including
Appendix A), distributions shall be made in a form determined under the rules of
this Section.
(A) STOCK DISTRIBUTIONS. Distributions from The Hartford Company Stock
Fund and the Hartford Life Company Stock Fund shall be made in the form
of stock of the applicable Company, except that: (i) fractional shares
will be paid in cash, and (ii) a recipient may request that such
amounts be paid in cash.
(B) LUMP SUM CASH DISTRIBUTIONS. Distributions from any Investment Fund
other than The Hartford Company Stock Fund or The Hartford Life Company
Stock Fund shall be paid in cash in a single lump sum, unless otherwise
permitted by the Plan.
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(C) PERIODIC CASH DISTRIBUTIONS. So long as the Member or Deferred
Member's Vested Share is at least $5,000 and the first payment is at
least $1,000, one of the two forms of periodic cash distribution
described in Section 11.6 below may be requested by (i) a Member whose
employment terminates after reaching age 55, (ii) a Member whose
employment terminates before reaching age 55 due to Retirement or
Disability, and (iii) a Deferred Member who has reached age 55.
(D) PRIOR PLAN TRANSFERS. Alternative methods of distribution may apply
to that portion of an Account attributable to a Prior Plan Transfer.
11.6 DISTRIBUTION OF PERIODIC PAYMENTS. A person described in Section 11.5(C)
may request one of the forms of periodic cash distributions described in this
Section.
(A) ANNUAL CASH INSTALLMENTS OVER A SELECTED PERIOD OF YEARS. Annual
cash payments may be made over a period of years selected by the
recipient that does not exceed the lesser of (i) 20 years, (ii) the
number of years comprising the life expectancy of the recipient alone
if the recipient is unmarried or is a Spouse Beneficiary, or the number
of years comprising the joint life expectancy of the recipient (other
than a Spouse Beneficiary) and spouse if the recipient is married, such
expectancies to be determined under the rules of Section 11.6(B). The
first of such payments shall be made as soon as practicable after the
applicable Valuation Date, and the remaining payments shall be made
annually on each anniversary thereafter. The amount of each payment
shall be determined by multiplying the value of the recipient's
Accounts as of the applicable Valuation Date by a fraction, the
numerator of which shall be one, and the denominator of which shall be
the number of years in the selected period.
(B) ANNUAL CASH INSTALLMENTS OVER EXPECTED LIFE. Annual Cash payments
may be made over the period of years comprising the recipient's life
expectancy, as actuarially determined at the time of the first
installment, and as redetermined annually thereafter. The first of such
payments will be made as soon as practicable after the applicable
Valuation Date, and the remaining payments shall be made annually on
each anniversary thereafter. The amount of each payment shall be
determined by multiplying the value of the recipient's Accounts as of
the applicable Valuation Date by a fraction, the numerator of which
shall be one, and the denominator of which shall be the number of years
and any fraction of years that comprises the recipient's life
expectancy, based on his or her age and the mortality table (to be
approved by the Plan Administrator) at the time the particular
installment is payable. Accounts.
(C) LATER DISTRIBUTION OF LUMP SUM PAYMENT. A person who previously
requested or is otherwise receiving a distribution of periodic payments
under this Section may, at any time thereafter, request a lump sum cash
distribution of the value of any unpaid installments.
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11.7 DISTRIBUTION IN THE EVENT OF DEATH.
(A) DEATH OF MEMBER OR DEFERRED MEMBER AFTER REQUESTING NON-PERIODIC
DISTRIBUTION. If a Member or Deferred Member requests a non-periodic
distribution and dies after the applicable Valuation Date or the
issuance of any check for any part of such distribution, but before
negotiating any check comprising such distribution, the distribution
shall be paid to his or her estate. If such a person dies before the
Valuation Date or issuance of such a check, then the distribution shall
be paid to his or her Beneficiary. For purposes of this paragraph, a
check will be considered issued on the earlier of (i) the date of
issuance shown on the check, or (ii) the Valuation Date.
(B) DEATH OF MEMBER OR DEFERRED MEMBER AFTER REQUESTING PERIODIC
DISTRIBUTION. If a Member or Deferred Member requests a periodic
distribution permitted by Section 11.6, but dies before all of the
installments comprising such distribution are paid, then (i) if the
Beneficiary of such Member or Deferred Member is not a spouse, and if
an installment is paid with a Valuation Date that occurred before his
or her death and before the negotiation of the check comprising such
installment, then such installment shall be paid to his or her estate,
and the remaining value of the Accounts in question shall be paid to
his or her Beneficiary in a single lump sum cash payment, or (ii) if
the Beneficiary of the Member or Deferred Member is a spouse, then such
spouse Beneficiary may continue receiving periodic distributions (in
accordance with the distribution method in place at the time of death),
or may request a lump sum distribution of the value of the Accounts as
permitted by the Plan (and no deferral of receipt of such value will be
permitted).
(C) DEATH OF SPOUSE BENEFICIARY. If a spouse Beneficiary with Accounts
in the Plan dies, payment of the remaining value of such Accounts shall
be made to the Beneficiary of such spouse, if any, or if none, to the
estate of such spouse, in each case such payment to be made in the form
of a single lump sum cash payment.
(D) PROOF OF DEATH AND RIGHTS OF BENEFICIARIES; DISPUTES. The Pension
Administration Committee and/or the Plan Administrator may require and
rely on such proof of death and such evidence of the right of any
Beneficiary or other person to receive the undistributed value of the
Accounts of a deceased Member, Deferred Member or Beneficiary as
determined appropriate, and the determination of the rights of
Beneficiaries or other persons to receive payment shall be conclusive.
Payment to any Beneficiary shall be final and shall fully satisfy and
discharge the obligation of the Plan with respect to any and all
Accounts of a deceased Member or Deferred Member. In the event of a
dispute regarding an Account, the Pension Administration Committee may
make a final determination, or initiate or participate in any action or
proceeding as may be necessary or appropriate to determine any
Beneficiary under the Plan. During the pendency of any action or
proceeding, the Pension Administration Committee may deposit an amount
equal to the disputed payment with a court and such deposit shall
relieve the Plan of all of its obligation with respect to any such
disputed Accounts. Alternatively such Committee, at its discretion, may
direct any disputed
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Accounts be invested in the Investment Fund involving the least risk of
loss of assets (as determined in the sole discretion of such Committee)
pending resolution of the dispute regarding such Accounts.
11.8 DIRECT ROLLOVER OF CERTAIN DISTRIBUTIONS.
(A) DEFINITIONS. For purposes of this Section, the following
definitions shall apply:
(i) "DISTRIBUTEE" includes a Member or Deferred Member, his or
her spouse Beneficiary, and any spouse or former spouse who is
an alternate payee under QDRO pursuant to Article Twelve.
(ii) "ELIGIBLE ROLLOVER DISTRIBUTION" is a withdrawal or
distribution of any part of a person's Vested Share, except:
(a) any distribution that is one of a series of substantially
equal periodic payments made for the life or life expectancy
of the Distributee, or for a specified period of ten years or
more, (b) any distribution required under Code Section
401(a)(9), (c) any portion of a distribution not includable in
gross income, and (d) any other distribution that is not
qualify as an eligible rollover distribution under the Code.
(iii) "ELIGIBLE RETIREMENT PLAN" means (a) an individual
retirement account described in Code Section 408(a), (b) an
individual retirement annuity described in Code Section
408(b), (c) an annuity plan described in Code Section 403(a),
or (d) a qualified plan described in Code Section 401(a) that
accepts the Eligible Rollover Distribution. Notwithstanding
the foregoing, for a spouse Beneficiary, an Eligible
Retirement Plan shall only include an individual retirement
account described in Code Section 408(a) or an individual
retirement annuity described in Code Section 408(b).
(iv) "DIRECT ROLLOVER" means a payment by the Plan directly to
the Eligible Retirement Plan specified by the distributee in
cash and/or shares.
(B) ABILITY TO REQUEST A DIRECT ROLLOVER. If the Plan Administrator
determines that a withdrawal or distribution hereunder qualifies as an
Eligible Rollover Distribution, the Distributee may request a Direct
Rollover of all or part of such withdrawal or distribution to one or
two Eligible Retirement Plans that accept such Direct Rollover.
(C) DIRECT ROLLOVERS NOT PERMITTED IN CERTAIN CIRCUMSTANCES. In the
event that the provisions of this Section 11.8 or any part hereof
ceases to be required by law, than this Section or the part not
required automatically shall be of no further force or effect.
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11.9 ELECTIVE TRANSFERS FROM PLAN. A distribution or withdrawal from the Plan
shall be eligible for an elective transfer to a qualified transferee employee
plan, and as such will generally be treated as a distribution of a Member's
accrued benefit under the Plan (but shall not be treated as a distribution for
purposes of the minimum distribution requirements of Code Section 401(a)(9)),
only if all of the following requirements are satisfied: (A) the transfer must
be payable proximate to, and solely on account of, a disposition of assets or a
subsidiary described in Code Sections 401(k)(10), (B) the transfer must satisfy
the requirements of Code Section 414(l), (C) the transfer must be conditioned
upon a voluntary, fully informed election by the Member to make the transfer,
and in making such election, the Member must have the option of retaining his or
her Account benefits (including all optional forms of benefit) under this Plan,
(D) if Code Sections 401(a)(11) and 417 otherwise apply to the Account, the
spousal consent requirements of those Section must be met with respect to the
transfer, (E) the notice requirement described in Code Section 417, if
applicable, must be met with respect to the Member and spousal transfer
election, (E) the Accounts to be transferred must be eligible for immediate
distribution or withdrawal under the Plan, (F) the amount of the benefit
transferred must be equal to the transferor's entire nonforfeitable Account
balance under the Plan, and (G) the Member must be fully vested in the
transferred benefit under the transferee plan.
ARTICLE TWELVE
QUALIFIED DOMESTIC RELATIONS ORDERS
12.1 PROCEDURES FOR QDROS. The Pension Administration Committee shall establish
procedures consistent with Code Section 414(p) to determine the qualified status
of any Domestic Relations Order, which shall be referred to herein as a "DRO"
and which means a judgment, decree or order or any modification thereof
((including approval of a property settlement agreement) that (A) relates to the
provision of child support, alimony payments or marital property rights to a
spouse, former spouse, child, or other dependent of a Member, and (B) is made
pursuant to a state domestic relations law (including a community property law).
Such Committee shall also establish procedures to administer any QDRO (as
defined below), and to provide all notices required by Code Section 414(p) to
the Member, and to the Alternate Payee, which shall mean a spouse, former
spouse, child or other dependent of a Member who is recognized by a DRO as
having a right to receive all, or a portion of, the benefits payable under the
Plan with respect to such Member. All procedures so established shall be binding
on all Members, Deferred Members and Alternate Payees.
12.3 DETERMINATION OF QDRO STATUS. Within a reasonable period of time after the
receipt of a DRO (or any modification thereof), the Pension Administration
Committee or designee shall determine whether such order qualifies a s qualified
domestic relations order under Code Section 414(p) Any DRO that so qualifies
shall be considered a "QDRO" for purposes of this Article Twelve. A DRO shall
not fail to qualify as a QDRO merely because it provides for payment to the
Alternate Payee before the Member's Termination of Employment.
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12.4 ESTABLISHMENT OF TEMPORARY HOLDING ACCOUNT. If, during any period in which
the issue of whether a DRO qualifies as a QDRO is being determined, an Alternate
Payee would be entitled to payment if the order were determined to be a QDRO,
the Pension Administration or designee shall cause to be segregated in a
separate account all amounts that would be payable to the any Alternate Payee
during such period if the order were determined to be a QDRO. Notwithstanding
anything herein to the contrary, (A) any amounts held in such an account shall
not be eligible for withdrawal or distribution from the Plan, and (B) such
amounts shall not be counted in determining the maximum amount available for a
loan under Article Ten.
12.5 PAYMENT FROM TEMPORARY HOLDING ACCOUNT IN CERTAIN CASES. If, by the
expiration of the 18 month period beginning on the date the first payment would
be required to be made to an Alternate Payee under a DRO, either (i) it is
determined that the DRO does not qualify as a QDRO, or the issue as to whether
the DRO so qualifies has not been resolved, the Pension Administration Committee
or designee shall cause to be paid all amounts which have been segregated
pursuant to Section 12.4, including any earnings having accrued thereon, to the
person who would have been entitled to such amounts if there had been no DRO.
Notwithstanding the foregoing, if the Member or his or her Beneficiaries are not
yet entitled, or have not elected, to receive benefit payments under the Plan,
such segregated amounts, including all earnings having accrued thereon, shall be
restored to the Member's Accounts and invested in accordance with the investment
election most recently submitted by the Member under Article Eight.
12.6 PAYMENT TO ALTERNATE PAYEE OF ORDER IF DETERMINED TO BE A QDRO. If a QDRO
is determined to exist, (i) the Trustee shall be instructed to apply, on a
prospective basis, the terms and provisions of such QDRO, and (ii) any unpaid
amounts segregated under this Article Twelve shall be paid in accordance with
the Plan, including any earnings having accrued thereon, shall be paid in
accordance to the applicable Alternate Payee in a cash lump sum amount as soon
as practicable thereafter.
12.5 SUBSEQUENT DETERMINATION OR ORDER TO BE APPLIED PROSPECTIVELY. If , after
the expiration of the 18-month period beginning on the date the first payment
would be required to be made to an Alternate Payee under a DRO, such DRO is
determined to qualify as a QDRO, such QDRO shall be applied prospectively only.
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ARTICLE THIRTEEN
GENERAL MATTERS
RELATING TO COMMITTEES
13.1 APPOINTMENT OF COMMITTEES. From time to time, the Board of Directors or an
officer of Hartford Fire to whom authority has been delegated by the Board shall
appoint a Pension Administration Committee, a Pension Fund Trust and Investment
Committee, and a Hardship Committee to serve at the pleasure of the Board or
appointing officer, each such Committee to be comprised of the number of members
set forth herein. The Board of Directors or appointing officer may also
designate alternate Committee members to act in the absence of regular Committee
members. The Board of Directors or appointing officer shall designate a Chairman
from among the regular members of each Committee, and shall also designate a
Secretary from among the members of each Committee who may be, but need not be,
one of the members thereof. Any person so appointed may resign at any time by
delivering his or her written resignation to the Secretary of Hartford Fire and
the Chairman or Secretary of his or Committee.
The Pension Administration shall be comprised of not less than five persons. The
Pension Fund Trust and Investment Committee shall be comprised of not less than
four persons, and the Hardship Committee shall be comprised of not less than
three persons. Notwithstanding any vacancies, the Pension Administration
Committee and the Pension Fund Trust and Investment Committee each may act as
long as there are at least three members of thereof, and the Hardship Committee
may act as long as there are at least two members thereof.
13.2 COMMITTEES TO BE NAMED FIDUCIARIES. Each Committee appointed pursuant to
the Plan is designated as a named fiduciary within the meaning of Section 402(a)
of ERISA.
13.3 AUTHORITY OF COMMITTEES. Each Committee shall have the authority, powers
and responsibilities set forth in the Plan, and shall also have such authority,
powers and responsibilities as may from time to time be delegated or allocated
to them by resolutions of the Board of Directors, including, but not limited to,
powers reserved to the Board of Directors to the extent specifically delegated
to a particular Committee by the Board of Directors.
13.4 ACTION BY COMMITTEES. Action by each Committee may be taken by majority
vote of its members and/or alternate members at a meeting upon such notice, or
upon waiver of notice, and at such time and place as each Committee may
determine from time to time; or action may be taken by written consent of a
majority of the members of the Committee without a meeting with the same effect
for all purposes as if assented to at a meeting.
13.5 POLICIES AND PROCEDURES OF COMMITTEES. Each Committee shall establish such
policies, procedures, rules and regulations as such Committees may deem
necessary to carry out the provisions of the Plan and transactions of their
business.
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13.6 APPOINTMENT OF SUBCOMMITTEES. Each Committee may appoint from among their
members such subcommittees with such powers as may be determined appropriate by
the appointing Committee, and each may authorize one or more of its members or
any agent to execute or deliver any instrument, make any payment, or take any
other action on behalf of the appointing Committee.
13.7 DELEGATION OF COMMITTEE AUTHORITY. Each Committee may in its sole
discretion delegate to one or more of its members or alternate members, or to an
administrator or manager, or to such other individual or agent as may be
selected by the Committee, all or a portion of its authority, powers and
responsibilities, including the authority to supervise the conduct of the daily
affairs of the Committee, or to take any other action on behalf of the
delegating Committee as may be determined appropriate by the Committee in its
sole discretion (including the execution or delivery of any instrument or the
making of any payment on behalf of the Committee), each of which of the
foregoing shall be carried out in accordance with the provisions of the Plan and
any policies which may from time to time be established by the delegating
Committee.
13.8 USE OF EXPERTS BY COMMITTEES. Each Committee may retain counsel, employ
agents and provide for such clerical, accounting and their services as it may
require in carrying out its responsibilities under the Plan.
13.9 COMPENSATION OF COMMITTEE MEMBERS. No member of any Committee shall receive
any compensation for his or her services as such, and except as required by law,
no bonds or other security shall be required of him or her in such capacity in
any jurisdiction.
13.10 LIABILITY OF COMMITTEE MEMBERS. Each of the members of the Committees
shall use that degree of care, skill, prudence and diligence in carrying out
their duties that a prudent person, acting in a like capacity and familiar with
such matters, would use in the conduct of a similar situation. Committee members
shall not be liable for the breach of fiduciary responsibility of another
fiduciary unless: (A) he or she participates knowingly in, or knowingly
undertakes to conceal, an act or omission of such other fiduciary, knowing such
act or omission is a breach, (B) by his or her failure to discharge his or her
duties solely in the interest of the Members and other persons entitled to
benefits under the Plan, for the exclusive purpose of providing benefits and
defraying reasonable expenses of administering the Plan not met by the Company,
he or she has enabled such other fiduciary to commit a breach, (C) he or she has
knowledge of a breach by such other fiduciary and does not make reasonable
efforts to remedy the breach, or (D) if the Committee of which he or she is a
member improperly allocates responsibilities among its members or to others and
he or she fails to review prudently such allocation.
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ARTICLE FOURTEEN
ADMINISTRATION OF PLAN -
PENSION ADMINISTRATION COMMITTEE
14.1 COMPOSITION OF PENSION ADMINISTRATION COMMITTEE. The Pension Administration
Committee shall be comprised of not less than five members. Notwithstanding any
vacancies in memberships, the Pension Administration Committee may act so long
as at least three memberships are filled.
14.2 AUTHORITY AND RESPONSIBILITIES OF PENSION ADMINISTRATION COMMITTEE. The
Pension Administration Committee shall be responsible, except as otherwise
herein expressly provided, for general supervision of the administration of the
Plan. Said Committee shall also have such authority, powers and responsibilities
as are set forth in the Plan or may be delegated by the Board of Directors as
provided in Article Thirteen. Said Committee shall also have the right to
exercise powers reserved to the Board of Directors hereunder, including the
right to amend the Plan, to the extent that, in the judgment of said Committee,
the exercise of such powers does not involve any material cost to the Company.
14.3 CONFIDENTIALITY OF INFORMATION. For purposes of the regulations under
Section 404(c) of ERISA, the Pension Administration Committee shall be
designated the fiduciary responsible for safeguarding the confidentiality of all
information relating to the purchase, sale and holding of employer securities
and the exercise of shareholder rights appurtenant thereto. The Pension
Administration Committee shall safeguard such information pursuant to written
procedures providing for such confidentiality. In addition, for purposes of
avoiding any situation for undue employer influence in the exercise of any
shareholder rights, the Pension Administration Committee shall appoint an
independent fiduciary, who shall not be affiliated with any sponsor of the Plan,
to ensure the maintenance of confidentiality pursuant to the regulations under
Section 404(c) of ERISA.
14.4 INTERPRETATION OF THE PLAN. Except as to matters which are required by law
to be determined or performed by the Board of Directors, or which from time to
time the Board of Directors may reserve to itself or allocate or delegate to
officers of Hartford Fire or to another Committee, the Pension Administration
Committee shall have the full discretionary authority to determine all questions
and to make all factual determinations regarding any and all matters arising in
the administration, interpretation and application of the Plan, including the
right to remedy possible ambiguities, inequities, inconsistencies or omissions.
Such determinations (any such determinations as may be made by the Board of
Directors with respect to any of the foregoing matters) shall be final,
conclusive and binding on all parties.
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14.5 DELEGATION OF AUTHORITY TO PLAN ADMINISTRATOR. The Pension Administration
Committee may delegate to the Plan Administrator or other administrator the
responsibility of administering and operating the details of the Plan in
accordance with the provisions of the Plan and any policies which may from time
to time be established by the Pension Administration Committee.
ARTICLE FIFTEEN
MANAGEMENT OF INVESTMENT FUNDS -
PENSION FUND TRUST AND INVESTMENT COMMITTEE
15.1 COMPOSITION OF PENSION FUND TRUST AND INVESTMENT COMMITTEE. The Pension
Fund Trust and Investment Committee shall be comprised of not less than four
members. Notwithstanding any vacancies in memberships, the Pension Fund Trust
and Investment Committee may act so long as at least three memberships are
filled.
15.2 AUTHORITY AND RESPONSIBILITIES OF PENSION FUND TRUST AND INVESTMENT
COMMITTEE. The Pension Fund Trust and Investment Committee shall be responsible,
except as otherwise herein expressly provided, for directing and coordinating
all activity relating to the investment management of the assets of the Plan.
Said Committee shall also have such authority, powers and responsibilities as
are set forth in the Plan or may be delegated by the Board of Directors as
provided in Article Thirteen, including, but not limited to the following: (A)
Establishment of one or more trusts for the Plan and any funding agreements for
the Plan, (B) Selection and appointment of the Trustee and any funding agents,
(C) Provide, consistent with the provisions of the Plan and applicable trusts,
direction to the Trustee, which may involve but need not be limited to direction
of investment of all or a part of the Plan assets, and (D) Appoint and provide
for use of investment advisors and investment managers. In discharging the
foregoing responsibilities, the Pension Fund Trust and Investment Committee
shall evaluate and monitor the investment performance of the Trustee and
investment managers, if any.
15.3 TRUST FUND. All of the funds of the Plan shall be held by a Trustee
appointed from time to time by the Pension Fund Trust and Investment Committee
in one or more trusts under a trust instrument or instruments approved or
authorized by said Committee for use in providing the benefits of the Plan;
provided that no part of the corpus or income of the Trust Fund shall be used
for, or diverted to, purposes other than for the exclusive benefit of Members,
Deferred Members and Beneficiaries.
15.4 REPORTS TO MEMBERS AND DEFERRED MEMBERS. At least annually at a time to be
determined by the Pension Administration Committee, each Member and Deferred
Member shall be furnished a statement setting forth the value of each of his or
her Accounts, together with a statement of the amounts contributed to each such
Account by the Member or Deferred Member and by the Company and the vested
amount of the Company Contribution Account or the earliest time a portion of the
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Company Contribution Account will become vested.
15.5 FISCAL YEAR. The fiscal year of the Plan and the trust shall end on the
30th day of December in 1997, and shall end on the 31st day of December in years
after 1997 or such other date as may be designated by the Pension Fund Trust and
Investment Committee.
ARTICLE SIXTEEN
HARDSHIP WITHDRAWALS -
HARDSHIP COMMITTEE
16.1 COMPOSITION OF HARDSHIP COMMITTEE. The Hardship Administration Committee
shall be comprised of not less than three members. Notwithstanding any vacancies
in memberships, the Pension Administration Committee may act so long as it has
at least two memberships are filled.
16.2 AUTHORITY AND RESPONSIBILITIES OF HARDSHIP COMMITTEE. The Hardship
Committee shall be responsible, except as otherwise herein expressly provided,
for determining whether a bona fide financial hardship exists as a condition for
a Member's withdrawal from his or her Supplemental Before-Tax Investment Account
and his or her Basic Before-Tax Investment Account under the Plan. Said
Committee shall also have such authority, powers and responsibilities as are set
forth in the Plan or may be delegated by the Board of Directors as provided in
Article Thirteen.
16.3 DETERMINATION OF FINANCIAL HARDSHIP. In determining whether a bona fide
financial hardship exists in a particular case, the Hardship Committee shall
take into account all pertinent facts and circumstances and shall base its
determination on the meaning of the term hardship under the applicable tax laws,
including cases and Internal Revenue Service guidelines. A determination by the
Hardship Committee as to the existence or absence of a hardship shall be final,
conclusive and binding on all parties.
ARTICLE SEVENTEEN
GENERAL AND ADMINISTRATIVE PROVISIONS
17.1 NO RIGHT TO EMPLOYMENT. Nothing herein contained nor any action taken under
the provisions hereof shall be construed as giving any Employee the right to be
retained in the employ of the Company.
17.2 INALIENABILITY OF BENEFITS. Except as specifically provided in the Plan or
as applicable law may
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otherwise require or as may be required under the terms of a qualified domestic
relations order, no benefit under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, and any attempts so to do shall be void, nor shall any such benefit be
in any manner liable for or subject to debts, contracts, liabilities,
engagements or torts of the person entitled to such benefit; and in the event
that the Plan Committee shall find that any Member, Deferred Member or
Beneficiary who is or may become entitled to benefits hereunder has become
bankrupt or that any attempt has been made to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge any of his or her benefits under
the Plan, except as specifically provided in the Plan or as applicable law may
otherwise require, then such benefit shall cease and terminate, and in that
event the Plan Committee shall hold or apply the same to or for the benefit of
such Member, Deferred Member or Beneficiary who is or may become entitled to
benefits hereunder, his or her spouse, children, parents or other blood
relatives, or any of them.
17.3 SOURCE OF BENEFIT PAYMENTS. Benefits under the Plan shall be payable only
out of the Trust Fund, and the Company shall not have any legal obligation,
responsibility or liability to make any direct payment of benefits under the
Plan. Neither the Company nor the Trustee guarantees the Trust Fund against any
loss or depreciation or guarantees the payment of any benefit hereunder. No
person shall have any rights under the Plan with respect to the Trust Fund, or
against the Company, except as specifically provided for herein.
17.4 PAYMENT OF EXPENSES. Direct charges and expenses arising out of the
purchase or sale of securities and taxes levied on or measured by such
transactions, and any investment management fees, with respect to any fund, may
be paid in part by the Company. Any such charges, expenses, taxes and fees not
paid by the Company shall be paid from the fund with respect to which they are
incurred. An annual charge to the Trust Fund of up to 0.25% of the market value
of the assets held by such Trust Fund shall be charged and applied to satisfy
expenses incurred in conjunction with Plan administration, including, but not
limited to, investment management, Trustee, record keeping, and audit fees; the
Company shall pay all other expenses reasonably incurred in administering the
Plan, including expenses of the Plan Committee, the Pension Fund Trust and
Investment Committee, the Hardship Committee and the Trustee, such compensation
to the Trustee as from time to time may be agreed between the Pension Fund Trust
and Investment Committee and Trustee, fees for legal services, investment
management and all taxes, if any.
17.5 RELIEF FROM LIABILITY. Except with respect to shares held in the Member's
ESOP Account, the Plan is intended to constitute a Plan as described in Section
404(c) of ERISA and Title 29 of the Code of Federal Regulations Section
2550.404c-1. The Plan fiduciaries are relieved of any liability for any losses
that are the direct and necessary result of investment instructions given by any
Member, Deferred Member or Beneficiary.
17.6 UNIFORM ACTION BY CERTAIN COMMITTEES. Action by the Pension Administration
Committee and the Hardship Committees shall be uniform in nature as applied to
all persons similarly situated, and no such action shall be taken which will
discriminate in favor of any Members who are Highly Compensated Employees.
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17.7 AMENDMENT OF PLAN. The Board of Directors reserves the right at any time
and from time to time, and retroactively if deemed necessary or appropriate to
conform with governmental regulations or other policies, to modify or amend in
whole or in part any or all of the provisions of the Plan; provided that no such
modification or amendment shall (A) make it possible for any part of the funds
of the Plan to be used for, or diverted to, purposes other than for the
exclusive benefit of Members, Deferred Members and Beneficiaries, or (B)
increase the duties of the Trustee without its consent thereto in writing.
Except as may be required to conform with governmental regulations, no such
amendment shall adversely affect the rights of any Member or Deferred Member
with respect to contributions made on his or her behalf prior to the date of
such amendment.
17.8 MERGER OR CONSOLIDATION OF PLAN. The Plan may not be merged or consolidated
with, nor may its assets or liabilities be transferred to, any other plan unless
each Member or Deferred Member under the Plan would, if the resulting plan were
then terminated, receive a benefit immediately after the merger, consolidation,
or transfer which is equal to or greater than the benefit he or she would have
been entitled to receive immediately before the merger, consolidation, or
transfer if the Plan had then terminated.
17.9 TERMINATION OF PLAN. The Plan is entirely voluntary on the part of the
Company. The Board of Directors reserves the right at any time to terminate the
Plan, the trust agreement and the trust hereunder or to suspend, reduce or
partially or completely discontinue contributions thereto. In the event of such
termination or partial termination of the Plan or complete discontinuance of
contributions, the interests of Members and Deferred Members shall automatically
become nonforfeitable. In the event of such termination or partial termination
or complete discontinuance, any forfeitures not previously applied in accordance
with Article Five shall be credited ratably to the Accounts of all Members and
Deferred Members in proportion to the amounts of Matching Company Contributions
made under Article Five credited during the current calendar year, or, if no
Matching Company Contributions have been made during the current calendar year,
then in proportion to such Matching Company Contributions during the last
previous calendar year during which such Matching Company Contributions were
made.
17.10 HEADINGS AND WORD USAGE. The headings used in this Plan are used for
convenience of reference and in the case of any conflict, the text of the Plan,
rather than any headings, shall control. Words used in the singular are intended
to include the plural, whenever appropriate.
17.11 CONSTRUCTION. The Plan shall be construed, regulated and administered in
accordance with the laws of the State of New York, subject to the provisions of
applicable Federal laws.
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APPENDIX A
1. APPLICATION TO CAMERON & COLBY. This Appendix A shall apply solely with
respect to Members who formerly were participants in the Cameron & Colby Co.
Inc. Profit Sharing Plan (the "Cameron & Colby Plan") and with respect to whom
amounts were transferred from the Cameron & Colby Plan to the Pre-Distribution
ITT Plan.
2. WITHDRAWAL FROM SUPPLEMENTAL BEFORE-TAX ACCOUNT AND BASIC BEFORE-TAX
INVESTMENT ACCOUNT. A Member Whose Basic Before-Tax Investment Account includes
transfers from the Cameron & Colby Plan may only make withdrawals from his or
her Basic Before-Tax Investment Account under Section 10.2 with the written
consent of the Member's spouse on a form approved by the Plan Committee and
witnessed by a notary public. Withdrawals from such Member's Basic After-Tax
Investment Account, Supplemental After-Tax Investment Account, Supplemental
Before-Tax Investment Account, Company Contribution Account and ESOP Account are
not subject to this Section 10.2.
3. TRANSFERRED CAMERON & COLBY PLAN ACCOUNTS.
(A) Notwithstanding anything in Article Eleven to the contrary, the
automatic form of distribution shall be a joint and 50% survivor
annuity for married Members or Deferred Members whose Vested Share
exceeds $3,500 and which is in whole or in part attributable to a
direct transfer of account values from the Cameron & Colby Plan. The
joint and 50% survivor annuity shall be the actuarial equivalent of
such Member's or Deferred Member's Vested Share which is attributable
to values transferred from the Cameron & Colby Plan and will provide an
annuity for the life of the Member or Deferred Member with a survivor
annuity for the life of the Member's or Deferred Member's spouse which
is equal to one-half of the amount payable during their joint lives.
The joint and 50% survivor annuity shall be provided by the Savings
Plan Administrator purchasing a single premium non-transferable annuity
contract from an insurance company. That portion of such Member's or
Deferred Member's Vested Share not attributable to values transferred
from the Cameron & Colby Plan shall be paid in accordance with Article
Eleven of the Plan.
(B) A Member or Deferred Member subject to this Section 3 may elect to
defer distribution pursuant to Article Eleven or waive the automatic
joint and 50% survivor annuity and elect one of the methods of
distribution set forth in Article Eleven. A waiver and election must be
consented to by the spouse of the Member and Deferred Member in writing
and witnessed by a notary public. A waiver and election may be revoked
with the written consent of the spouse at any time within the 90-day
period ending with the commencement date of the alternative method of
distribution.
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ADDITIONAL PLAN INFORMATION
INVESTMENT EXPERIENCE
Set forth below are the investment gains or losses, rounded to the
nearest one-tenth of one percent, for The Hartford Company Stock Fund, the
Hartford Life Company Stock Fund, the Index Fund, and the Stable Value Fund for
the past five years:
<TABLE>
<CAPTION>
THE HARTFORD LIFE INDEX FUND STABLE VALUE
HARTFORD COMPANY STOCK FUND
COMPANY STOCK FUND
FUND* **
% % % %
INCREASE INCREASE INCREASE INCREASE
(DECREASE) (DECREASE) (DECREASE) (DECREASE)
<S> <C> <C> <C> <C>
1994 N/A N/A 1.2 7.2
1995 (2.7) N/A 37.3 6.8
1996 43.3 N/A 22.4 6.5
1997 39.7 22.2 33.1 6.3
1998 18.5 27.2 28.4 6.2
</TABLE>
*The Hartford Company Stock Fund was effective 12/19/95. Rates of return for
1995 are for the period 12/19/95-12/31/95.
The foregoing computations are provided solely for information and are not
necessarily indicative of future performance.
**The Hartford Life Company Stock Fund was effective May 22, 1997.
ADDITIONAL FUND INFORMATION
Information regarding the Plan's investment funds noted above is available and
may be obtained upon request during regular business hours. The investment
experience for the other plan funds is contained in the Hartford Mutual Funds
prospectus and will be contained in other documents supplied by the Hartford
Mutual Funds. Copies of the current mutual fund prospectuses are available upon
request by calling the ISP Information Line at 1-888-622-1200.
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SUMMARY OF
FEDERAL INCOME AND ESTATE TAX RULES
The following is a basic summary of our understanding of the current U.S.
Federal income and estate tax rules applicable to the Plan (which is intended to
qualify under both Sections 401(a) and 401(k) of the Internal Revenue Code).
These Federal tax rules do not necessarily apply for state, local, foreign and
possession tax purposes.
A Member's tax treatment will differ depending on the various elections he or
she makes under the terms of the Plan and under the tax laws. Moreover, the
applicable tax rules are complex and are subject to change and to IRS
interpretation. Accordingly, we emphasize that Members should not rely on this
summary but should consult their personal tax advisors as to the specific tax
consequences.
1. CONTRIBUTIONS. That portion of a Member's Salary which he or she designates
as a contribution to the Plan of After-Tax Savings is subject to Federal income
tax for the year of contribution (and no offsetting tax deduction is available
for such contribution). (Since After-Tax Savings are based on compensation that
has been taxed, a Member is entitled to recover these amounts tax-free at
withdrawal or distribution.)
By contrast, that portion of a Member's Salary which he or she designates as a
contribution of Before-Tax Savings is not subject to Federal income tax for the
year of contribution. (However, Before-Tax Savings are subject when earned to
Social Security and unemployment taxes.)
Under Federal tax law, a Member cannot contribute more than a dollar amount that
is indexed annually and is determined pursuant to Section 402(g) of the Internal
Revenue Code, which amount is communicated to Members each year ($10,000 for
1999). Further, a Highly Compensated Employee is subject to certain additional
limitations on the amounts he or she can contribute as either Before-Tax Savings
or After-Tax Savings. Matching Company contributions are not subject to Federal
income tax at the time of either contribution or vesting.
Income or gain derived by the Trust Fund from the investment or reinvestment of
Member or Company contributions is not taxed currently to either the Member or
the Trust Fund.
2. PLAN LOANS. No itemized deduction is allowed for interest on a Plan loan. A
Member does not obtain a tax basis in interest payments on a Plan loan and thus
cannot recover such amounts tax-free at the time of withdrawal or distribution.
If a Member defaults on a Plan loan during employment, he or she is treated as
having made a withdrawal during employment of the outstanding loan balance and
any accrued interest and, subject to certain exceptions, is subject to the tax
rules in 3 below.
If a Member elects to have any Plan loan canceled at his or her Termination of
Employment, he or she is treated as having received a distribution in cash in
the amount of the outstanding loan balance and any
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accrued interest and, subject to certain exceptions, is subject to the rules in
4 below.
3. WITHDRAWAL DURING EMPLOYMENT. Under Federal tax law, a Member may recover an
amount equal to his or her After-Tax Savings in the Plan on a tax-free basis
(since these amounts were subject to tax in the year of contribution).
To the extent that a Member makes a non-hardship withdrawal from his or her
Accounts in Contract I as permitted by Section 10.1 of the Plan, the withdrawal
will be treated first as a tax-free recovery of the Member's
previously-unrecovered After-Tax Savings made prior to January 1, 1987, if any,
with the balance of the withdrawal from Contract I from being fully taxable. To
the extent that a Member makes a non-hardship withdrawal from his or her
Accounts in Contract II as permitted by Section 10.1 of the Plan, the withdrawal
will be tax-free based on the ratio of the Member's previously-unrecovered
After-Tax Savings made on or after January 1, 1987 to the total amounts held in
Contract II. A 10% penalty tax will generally apply to the taxable portion of a
withdrawal during employment prior to attaining age 59-1/2. Hardship
withdrawals cannot be rolled over because they are not considered eligible
rollover distributions.
4. LUMP SUM DISTRIBUTION AFTER TERMINATION OF EMPLOYMENT. A Member or Deferred
Member who terminates employment with the Company and receives a lump sum
distribution of his or her Accounts will be subject to taxation on the cash
received and the cost (or value, if lower) of any The Hartford Stock or Hartford
Life Stock distributed, as reduced by any previously unrecovered After- Tax
Savings. Any appreciation on the distributed The Hartford Stock or Hartford Life
Stock while it was held by the Trust Fund ("unrealized appreciation") will not
be taxed until ultimate disposition of the shares and will constitute long-term
capital gain. A Member or Deferred Member who terminates employment with the
Company will not be taxed on unrealized appreciation on The Hartford Stock or
Hartford Life Stock attributable to previously unrecovered After-Tax Savings,
regardless of whether such amounts are distributed in a lump sum distribution.
The Member may defer income tax on the unrealized appreciation on The Hartford
Stock or Hartford Life Stock as long as the shares are retained.
A 10% penalty tax will generally apply to the taxable portion of a lump sum
distribution (other than tax-deferred unrealized appreciation on a distribution
of The Hartford Stock or Hartford Life Stock) unless the distribution follows
Termination of Employment during or after the calendar year in which age 55 is
attained, death or Disability or unless the Member or Deferred Member has
attained age 59-1/2 at distribution or if the distribution is used for
deductible medical expenses. The taxable portion of a lump sum distribution is
subject to 20% Federal withholding tax.
(A) FAVORABLE AVERAGING METHOD FOR LUMP SUM DISTRIBUTIONS. A Member or
Deferred Member who has terminated employment with the Company and who
has been an active Plan Member for at least 5 taxable years prior to
the year of distribution may be eligible to compute his or her tax on
the taxable portion of a lump sum distribution of all his or her
Accounts under the favorable averaging method. If such Member or
Deferred Member has attained age 59-1/2 at distribution, he or she may
elect to apply the 5-year averaging method as based on the rules and
rates in effect for the year of distribution. If such Member or
Deferred Member attained age 50 before January 1, 1986, he or she may
elect to apply either the 10-year averaging method as based on the
rules and rates in effect for 1986 or the 5-year averaging method as
based on the
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rules and rates in effect for the year of distribution. (The 10-year
averaging method is generally more favorable than the 5-year averaging
method except in the case of very large distributions.) A Member or
Deferred Member may elect averaging treatment (under either the 5-year
or 10-year method, but not both) for only one taxable year subsequent
to 1986. Effective for distributions occurring on or after January 1,
2000, the 5-year averaging method is no longer available and only
Members or Deferred Members who attained age 50 before January 1, 1986
may elect 10-year averaging.
A 10% penalty tax will generally apply to the taxable portion of the
distribution unless the distribution follows Termination of Employment
during or after the calendar year in which age 55 is attained, death or
Disability, or unless the Member or Deferred Member has attained age
59-1/2 at distribution or if the distribution is used for deductible
medical expenses. The taxable portion of a lump sum distribution is
subject to 20% Federal withholding tax. NOTE: The Member or Deferred
Member should ensure that the favorable averaging method is available
under current law, and that he or she qualifies for this favorable tax
treatment, before actually employing it on his or her tax return.
(B) ROLLOVER TREATMENT. A Member or Deferred Member may defer his or
her tax and avoid 20% Federal withholding tax to the extent he or she
elects to have all or a portion of the taxable portion of the
distribution directly rolled over to an IRA or other qualified plan. A
Member or Deferred Member who does not elect such a direct rollover may
also defer his or her tax by rolling over the taxable distribution into
an IRA or other qualified plan within 60 days of receipt of the
distribution. In such a case, in order for the Member or Deferred
Member to defer the full amount of his or her tax and obtain a refund
of the 20% withholding tax, he or she must contribute an additional
amount equal to the 20% that was withheld. The Member will be taxed to
the extent any portion of the distribution is not rolled over. Any
taxable portion not rolled over (other than certain tax-deferred
unrealized appreciation on a distribution of The Hartford Stock, as
previously discussed) will be taxed as ordinary income, and such
portion will generally be subject to a 10% penalty tax, unless the
distribution follows Termination of Employment during or after the
calendar year in which age 55 is attained, death or Disability, or
unless the Member or Deferred Member has attained age 59-1/2 at
distribution or if the distribution is used for deductible medical
expenses. A Member may roll over the proceeds of sale of all or a
portion of The Hartford Stock distributed (except to the extent it
represents After-Tax Savings) without recognition of gain (or loss) on
such sale. Any taxable portion of the distribution not rolled over (and
all subsequent distributions from the IRA) will not qualify for the
favorable averaging method (provided such treatment is then allowed by
law).
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5. INSTALLMENT PAYOUTS AND LIFE EXPECTANCY OPTION PAYMENTS. In the case of a
qualifying Member or Deferred Member who elects installment payouts or a Life
Expectancy Option, a pro rata portion of a certain number of payments will
represent a tax-free recovery of his or her previously unrecovered After-Tax
Savings, if any, with the balance of each such payment taxable as ordinary
income. The amount which is recovered each year depends upon the age of the
Member or Deferred Member at the time payments begin. A 10% penalty tax will
generally apply to the taxable portion of installment payouts (but not Life
Expectancy Option Payments) until attainment of age 59-1/2, unless the
distribution follows Termination of Employment during or after the calendar year
in which age 55 is attained, death or Disability or if the distribution is used
for deductible medical expenses. The taxable portion of installment payments
payable for a specified period of at least 10 years and of life expectancy
option payments is not eligible for rollover to an IRA or other qualified plan
and is subject to 10% Federal tax withholding unless the recipient elects not to
have withholding apply. The taxable portion of installment payments payable for
a specified period of less than 10 years is eligible for rollover to an IRA or
other qualified plan and is subject to 20% Federal tax withholding.
7. ESTATE TAXES AND TAXATION OF BENEFICIARIES. A Member's Accounts in the Plan
are subject to Federal estate tax on death. However, an unlimited marital
deduction is available to the extent that either a lump sum or non-terminable
interest in installment payments is distributable (directly or under a
qualifying trust) to the Member's spouse.
For Federal income tax purposes, distributions will be taxed to a Beneficiary in
substantially the same manner as if they had been distributed to the Member at
the time of his or her death. A Member's spouse, as Beneficiary, may defer
income tax on a lump sum distribution payable upon the Member's death to the
extent that he or she rolls over all or part of the taxable portion of the
distribution into an IRA within 60 days of receipt of the distribution (or in a
direct rollover to an individual retirement account or individual retirement
annuity to the extent permitted by the Plan.).
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