10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2004

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from____________ to_____________

Commission file number 001-13958

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	13-3317783
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

Hartford Plaza, Hartford, Connecticut 06115-1900
(Address of principal executive offices)

(860) 547-5000
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [   ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes [X] No [   ]

As of April 23, 2004, there were outstanding 292,023,474 shares of Common Stock, $0.01 par value per share, of the registrant.

INDEX

	Page
Independent Accountants’ Review Report		3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements		4
Condensed Consolidated Statements of Operations — First Quarter Ended March 31, 2004 and 2003		4
Condensed Consolidated Balance Sheets — As of March 31, 2004 and December 31, 2003		5
Condensed Consolidated Statements of Changes in Stockholders’ Equity — First Quarter Ended March 31, 2004 and 2003		6
Condensed Consolidated Statements of Comprehensive Income (Loss) — First Quarter Ended March 31, 2004 and 2003		6
Condensed Consolidated Statements of Cash Flows — First Quarter Ended March 31, 2004 and 2003		7
Notes to Condensed Consolidated Financial Statements		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		22
Item 3. Quantitative and Qualitative Disclosures About Market Risk		52
Item 4. Controls and Procedures		52
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		52
Item 6. Exhibits and Reports on Form 8-K		53
Signature		54
Exhibits Index		55
FORM OF EMPLOYMENT AGREEMENT
FORM OF EMPLOYMENT AGREEMENT
FORM OF EMPLOYMENT AGREEMENT
FORM OF EMPLOYMENT AGREEMENT
FORM OF EMPLOYMENT AGREEMENT
FORM OF EMPLOYMENT AGREEMENT
FORM OF KEY EXECUTIVE EMPLOYMENT AGREEMENT
SENIOR EXECUTIVE SEVERANCE PAY PLAN
INCENTIVE STOCK PLAN
DELOITTE & TOUCHE LLP LETTER OF AWARENESS
CERTIFICATION OF RAMANI AYER
CERTIFICATION OF DAVID M. JOHNSON
CERTIFICATION OF RAMANI AYER
CERTIFICATION OF DAVID M. JOHNSON

2

INDEPENDENT ACCOUNTANTS’ REVIEW REPORT

To the Board of Directors and Stockholders
The Hartford Financial Services Group, Inc.
Hartford, Connecticut

We have reviewed the accompanying condensed consolidated balance sheet of The Hartford Financial Services Group, Inc. and subsidiaries (the “Company”) as of March 31, 2004, and the related condensed consolidated statements of operations, changes in stockholders’ equity, comprehensive income (loss), and cash flows for the first quarter ended March 31, 2004 and 2003. These interim financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of the Company as of December 31, 2003, and the related consolidated statements of operations, changes in stockholders’ equity, comprehensive income, and cash flows for the year then ended (not presented herein); and in our report dated February 25, 2004, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2003 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

DELOITTE & TOUCHE LLP
Hartford, Connecticut
May 3, 2004

3

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Statements of Operations

	First Quarter Ended
	March 31,
(In millions, except for per share data)	2004			2003
	(Unaudited)
Revenues
Earned premiums	$	3,181		$	2,849
Fee income		786			617
Net investment income		1,517			788
Other revenues		104			122
Net realized capital gains (losses)		144			(45	)
Total revenues		5,732			4,331
Benefits, claims and expenses
Benefits, claims and claim adjustment expenses		3,297			5,245
Amortization of deferred policy acquisition costs and present value of future profits		679			564
Insurance operating costs and expenses		692			538
Interest expense		66			66
Other expenses		180			143
Total benefits, claims and expenses		4,914			6,556
Income (loss) before income taxes and cumulative effect of accounting change		818			(2,225	)
Income tax expense (benefit)		227			(830	)
Income (loss) before cumulative effect of accounting change		591			(1,395	)
Cumulative effect of accounting change, net of tax		(23	)		—
Net income (loss)	$	568		$	(1,395	)
Basic earnings (loss) per share
Income (loss) before cumulative effect of accounting change	$	2.04		$	(5.46	)
Cumulative effect of accounting change, net of tax		(0.08	)		—
Net income (loss)	$	1.96		$	(5.46	)
Diluted earnings (loss) per share
Income (loss) before cumulative effect of accounting change	$	2.01		$	(5.46	)
Cumulative effect of accounting change, net of tax		(0.08	)		—
Net income (loss)	$	1.93		$	(5.46	)
Weighted average common shares outstanding		289.9			255.4
Weighted average common shares outstanding and dilutive potential common shares		294.9			255.4
Cash dividends declared per share	$	0.28		$	0.27

See Notes to Condensed Consolidated Financial Statements.

4

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Balance Sheets

	March 31,			December 31,
(In millions, except for share data)	2004			2003
	(Unaudited)
Assets
Investments
Fixed maturities, available-for-sale, at fair value (amortized cost of $68,138 and $58,127)	$	72,814		$	61,263
Equity securities, held for trading, at fair value		7,831			—
Equity securities, available-for-sale, at fair value (cost of $557 and $505)		612			565
Policy loans, at outstanding balance		2,655			2,512
Other investments		1,845			1,507
Total investments		85,757			65,847
Cash		638			462
Premiums receivable and agents’ balances		2,969			3,085
Reinsurance recoverables		5,968			5,958
Deferred policy acquisition costs and present value of future profits		7,511			7,599
Deferred income tax		245			845
Goodwill		1,720			1,720
Other assets		5,315			3,704
Separate account assets		127,141			136,633
Total assets	$	237,264		$	225,853
Liabilities
Reserve for future policy benefits and unpaid claims and claim adjustment expenses
Property and casualty	$	20,246		$	21,715
Life		11,658			11,402
Other policyholder funds and benefits payable		45,321			26,185
Unearned premiums		4,612			4,423
Short-term debt		573			1,050
Long-term debt		4,580			4,613
Other liabilities		9,596			8,193
Separate account liabilities		127,141			136,633
Total liabilities		223,727			214,214
Commitments and Contingencies (Note 5)
Stockholders’ Equity
Common stock - 750,000,000 shares authorized, 294,661,289 and 286,339,430 shares issued, $0.01 par value		3			3
Additional paid-in capital		4,419			3,929
Retained earnings		6,986			6,499
Treasury stock, at cost - 2,984,622 and 2,959,692 shares		(39	)		(38	)
Accumulated other comprehensive income, net of tax		2,168			1,246
Total stockholders’ equity		13,537			11,639
Total liabilities and stockholders’ equity	$	237,264		$	225,853

See Notes to Condensed Consolidated Financial Statements.

5

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

	First Quarter Ended
	March 31,
(In millions, except for share data)	2004			2003
	(Unaudited)
Common Stock/Additional Paid-in Capital
Balance at beginning of period	$	3,932		$	2,787
Issuance of common stock in underwritten offering		411			—
Issuance of shares under incentive and stock compensation plans		67			8
Tax benefit on employee stock options and awards		12			1
Balance at end of period		4,422			2,796
Retained Earnings
Balance at beginning of period		6,499			6,890
Net income (loss)		568			(1,395	)
Dividends declared on common stock		(81	)		(69	)
Balance at end of period		6,986			5,426
Treasury Stock, at Cost
Balance at beginning of period		(38	)		(37	)
Return of shares under incentive and stock compensation plans to treasury stock		(1	)		—
Balance at end of period		(39	)		(37	)
Accumulated Other Comprehensive Income, Net of Tax
Balance at beginning of period		1,246			1,094
Change in unrealized gain/loss on securities		574			177
Cumulative effect of accounting change		292			—
Change in net gain/loss on cash flow hedging instruments		59			(23	)
Foreign currency translation adjustments		(3	)		9
Total other comprehensive income		922			163
Balance at end of period		2,168			1,257
Total stockholders’ equity	$	13,537		$	9,442
Outstanding Shares (in thousands)
Balance at beginning of period		283,380			255,241
Issuance of common stock in underwritten offering		6,703			—
Issuance of shares under incentive and stock compensation plans		1,619			200
Return of shares under incentive and stock compensation plans to treasury stock		(25	)		—
Balance at end of period		291,677			255,441

Condensed Consolidated Statements of Comprehensive Income (Loss)

	First Quarter Ended
	March 31,
(In millions)	2004			2003
	(Unaudited)
Comprehensive Income (Loss)
Net income (loss)	$	568		$	(1,395	)
Other Comprehensive Income
Change in unrealized gain/loss on securities		574			177
Cumulative effect of accounting change		292			—
Change in net gain/loss on cash flow hedging instruments		59			(23	)
Foreign currency translation adjustments		(3	)		9
Total other comprehensive income		922			163
Total comprehensive income (loss)	$	1,490		$	(1,232	)

See Notes to Condensed Consolidated Financial Statements.

6

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Statements of Cash Flows

	First Quarter Ended
	March 31,
(In millions)	2004			2003
	(Unaudited)
Operating Activities
Net income (loss)	$	568		$	(1,395	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Amortization of deferred policy acquisition costs and present value of future profits		679			564
Additions to deferred policy acquisition costs and present value of future profits		(952	)		(807	)
Change in:
Reserve for future policy benefits and unpaid claims and claim adjustment expenses and unearned premiums		(1,022	)		4,576
Reinsurance recoverables		151			(1,459	)
Receivables		(904	)		(95	)
Payables and accruals		575			(34	)
Accrued and deferred income taxes		641			(839	)
Net realized capital (gains) losses		(144	)		45
Net increase in equity securities, held for trading		(1,611	)		—
Net receipts from investment and universal life-type contracts credited to policyholder accounts associated with equity securities, held for trading		1,915			—
Depreciation and amortization		33			72
Cumulative effect of accounting change, net of tax		23			—
Other, net		147			39
Net cash provided by operating activities		99			667
Investing Activities
Purchase of available-for-sale investments		(4,674	)		(5,859	)
Sale of available-for-sale investments		4,315			3,364
Maturity of available-for-sale investments		763			931
Additions to property, plant and equipment, net		(18	)		(43	)
Net cash provided by (used for) investing activities		386			(1,607	)
Financing Activities
Issuance (repayment) of short-term debt, net		(477	)		—
Issuance of long-term debt		197			—
Repayment of long-term debt		(250	)		—
Issuance of common stock in underwritten offering		411			—
Net receipts from investment and universal life-type contracts charged against policyholder accounts		(164	)		1,279
Dividends paid		(79	)		(69	)
Proceeds from issuance of shares under incentive and stock compensation plans		55			6
Net cash provided by (used for) financing activities		(307	)		1,216
Foreign exchange rate effect on cash		(2	)		2
Net increase in cash		176			278
Cash - beginning of period		462			377
Cash - end of period	$	638		$	655
Supplemental Disclosure of Cash Flow Information:
Net Cash Paid (Received) During the Period For:
Income taxes	$	30		$	(45	)
Interest	$	55		$	48

See Notes to Condensed Consolidated Financial Statements.

7

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in millions except per share data unless otherwise stated)
(unaudited)

Note 1. Basis of Presentation and Accounting Policies

Basis of Presentation

The Hartford Financial Services Group, Inc. and its consolidated subsidiaries (“The Hartford” or the “Company”) provide investment products and life and property and casualty insurance to both individual and business customers in the United States and internationally.

On December 31, 2003, the Company acquired the group life and accident, and short-term and long-term disability business of CNA Financial Corporation. Accordingly, the Company’s results of operations for the quarter ended March, 31, 2004 reflect the inclusion of this business. These results were not material to consolidated operations. For further discussion of the CNA Financial Corporation acquisition, see Note 18 of Notes to Consolidated Financial Statements included in The Hartford’s 2003 Form 10-K Annual Report.

The condensed consolidated financial statements have been prepared on the basis of accounting principles generally accepted in the United States of America, which differ materially from the accounting prescribed by various insurance regulatory authorities. Subsidiaries in which The Hartford has at least a 20% interest, but less than a majority ownership interest, are reported using the equity method. All intercompany transactions and balances between The Hartford, its subsidiaries and affiliates have been eliminated.

The accompanying condensed consolidated financial statements and notes as of March 31, 2004, and for the first quarters ended March 31, 2004 and 2003 are unaudited. These financial statements reflect all adjustments (consisting only of normal accruals) which are, in the opinion of management, necessary for the fair presentation of the financial position, results of operations, and cash flows for the interim periods. These condensed financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in The Hartford’s 2003 Form 10-K Annual Report. The results of operations for the interim periods should not be considered indicative of results to be expected for the full year.

Reclassifications

Certain reclassifications have been made to prior period financial information to conform to the current period classifications.

Use of Estimates

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining reserves for future policy benefits and unpaid claims and claim adjustment expenses; deferred policy acquisition costs and present value of future profits; investments; pension and other postretirement benefits; and contingencies.

Significant Accounting Policies

For a description of accounting policies, see Note 1 of Notes to Consolidated Financial Statements included in The Hartford’s 2003 Form 10-K Annual Report.

Investments

As discussed in the “Adoption of New Accounting Standards” section below, on January 1, 2004 the Company reclassified certain separate account assets to the general account and classified a portion of these assets as trading securities. Trading securities are recorded at fair value with periodic changes in fair value recognized in net investment income.

Stock–Based Compensation

In January 2003, the Company began expensing all stock-based compensation awards granted or modified after January 1, 2003 under the fair value recognition provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation”. The fair value of stock-based awards granted or modified during the quarters ended March 31, 2004 and 2003 was $36 and $31, after-tax, respectively. The fair value of these awards will be recognized over the awards’ vesting period, generally 3 years. The expense associated with stock-based compensation awards for the first quarters ended March 31, 2004 and 2003, was $4 and $1, after-tax, respectively. Prior to January 1, 2004, the Company used the Black-Scholes model to estimate the fair value of the Company’s stock-based compensation. For all awards granted or modified on or after January 1, 2004, the Company used a binomial option-pricing model that incorporates the possibility of early exercise of options into the valuation. The binomial model also incorporates the Company’s historical forfeiture and exercise experience to determine the option value. For these reasons, the Company believes the binomial model provides a fair value that is more representative of actual historical experience than the value calculated under the Black-Scholes model.

All stock-based awards granted or modified prior to January 1, 2003 continue to be valued using the intrinsic value-based provisions set forth in Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees”. Under the intrinsic value method, compensation expense is determined on the measurement date, which is the first date on which both the number of shares the employee is entitled to receive and the exercise price are known. Compensation expense, if any, is measured based on the award’s intrinsic value, which is the excess of the market price of the stock over the exercise price on the measurement date. The expense related to stock-based employee compensation, including non-option plans, included in the determination of net income for the first quarters ended March 31, 2004 and 2003 is less than that which would have been

8

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Note 1. Basis of Presentation and Accounting Policies (continued)

recognized if the fair value method had been applied to all awards since the effective date of SFAS No. 123. (For further discussion of the Company’s stock compensation plans, see Note 11 of Notes to Consolidated Financial Statements included in The Hartford’s 2003 Form 10-K Annual Report.)

The following table illustrates the effect on net income (loss) and earnings (loss) per share as if the fair value method had been applied to all outstanding and unvested awards in each period. The pro forma fair values disclosed below related to awards granted prior to 2004 were calculated using the Black-Scholes option-pricing model and were not recalculated using the binomial model. The change in valuation methodology would have an insignificant impact on the pro forma amounts disclosed.

	First Quarter Ended
	March 31,
	2004			2003
	(Unaudited)
Net income (loss), as reported	$	568		$	(1,395	)
Add: Stock-based employee compensation expense included in reported net income (loss), net of related tax effects [1]		4			1
Deduct: Total stock-based employee compensation expense determined under the fair value method for all awards, net of related tax effects		(7	)		(9	)
Pro forma net income (loss) [2]	$	565		$	(1,403	)
Earnings (loss) per share:
Basic – as reported	$	1.96		$	(5.46	)
Basic – pro forma [2]	$	1.95		$	(5.49	)
Diluted – as reported [3]	$	1.93		$	(5.46	)
Diluted – pro forma [2] [3]	$	1.92		$	(5.49	)

[1]	Includes the impact of non-option plans of $1 for the first quarters ended March 31, 2004 and 2003.
[2]	The pro forma disclosures are not representative of the effects on net income (loss) and earnings (loss) per share in future periods.
[3]	As a result of the net loss in the quarter ended March 31, 2003, SFAS No. 128, “Earnings Per Share,” requires the Company to use basic weighted average shares outstanding in the calculation of first quarter 2003 diluted earnings per share, as the inclusion of options of 0.7 would have been antidilutive to the earnings per share calculation. In the absence of the net loss, weighted average common shares outstanding and dilutive potential common shares would have totaled 256.1.

Adoption of New Accounting Standards

In July 2003, Accounting Standards Executive Committee of the American Institute of Certified Public Accounts (“AICPA”) issued a final Statement of Position 03-1, “Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts” (the “SOP”). The SOP addresses a wide variety of topics, some of which have a significant impact on the Company. The major provisions of the SOP require:

• Recognizing expenses for a variety of contracts and contract features, including guaranteed minimum death benefits (“GMDB”), certain death benefits on universal-life type contracts and annuitization options, on an accrual basis versus the previous method of recognition upon payment;

• Reporting and measuring assets and liabilities of certain separate account products as general account assets and liabilities when specified criteria are not met;

• Reporting and measuring the Company’s interest in its separate accounts as general account assets based on the insurer’s proportionate beneficial interest in the separate account’s underlying assets; and

• Capitalizing sales inducements that meet specified criteria and amortizing such amounts over the life of the contracts using the same methodology as used for amortizing deferred acquisition costs (“DAC”).

The SOP was effective for financial statements for fiscal years beginning after December 15, 2003. At the date of initial application, January 1, 2004, the cumulative effect of the adoption of the SOP on net income and other comprehensive income was comprised of the following individual impacts:

	Net			Other
	Income			Comprehensive
Cumulative Effect of Adoption	(Loss)			Income
Establishing GMDB and other benefit reserves for annuity contracts	$	(54	)	$	—
Reclassifying certain separate accounts to general accounts		30			294
Other		1			(2	)
Total cumulative effect of adoption	$	(23	)	$	292

Death Benefits and Other Insurance Benefit Features

The Company sells variable annuity contracts that offer various guaranteed death benefits. For certain guaranteed death benefits, the Company pays the greater of (1) the account value at death; (2) the sum of all premium payments less prior withdrawals; or (3) the maximum anniversary value of the contract, plus any premium payments since the contract anniversary, minus any withdrawals following the contract anniversary. For certain guaranteed death benefits sold with variable annuity contracts beginning in June of 2003, the Company pays the greater of (1) the account value at death; or (2) the maximum anniversary value; not to exceed the account value plus the greater of (a) 25% of premium payments, or (b) 25% of the maximum anniversary value of the contract.

9

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Note 1. Basis of Presentation and Accounting Policies (continued)

The Company currently reinsures a significant portion of these death benefit guarantees associated with its in-force block of business. As of January 1, 2004, the Company has recorded a liability for GMDB and other benefits sold with variable annuity products of $225 and a related reinsurance recoverable asset of $108. As of March 31, 2004 the liability from GMDB and other benefits sold with variable annuity products was $218 with a related reinsurance recoverable asset of $101. The determination of the GMDB liability and related reinsurance recoverable is based on models that involve a range of scenarios and assumptions, including those regarding expected market rates of return and volatility, contract surrender rates and mortality experience. The assumptions used are consistent with those used in determining estimated gross profits for purposes of amortizing deferred acquisition costs.

The Individual Life segment sells universal life-type contracts with certain secondary guarantees, such as a guarantee that the policy will not lapse, even if the account value is reduced to zero, as long as the policyholder makes scheduled premium payments. The cumulative effect on net income upon recording liabilities for secondary guarantees was not material. Currently there is diversity in industry practice and inconsistent guidance surrounding the application of the SOP to universal life-type contracts. An AICPA task force has been convened to develop guidance surrounding the methodology for determining reserves for universal life-type contracts and the related secondary guarantees. This may result in an adjustment to the cumulative effect of adopting the SOP and could impact future earnings but is not expected to be material to the Company’s financial position or results of operations.

Separate Account Presentation

The Company had recorded certain market value adjusted (“MVA”) fixed annuity products and modified guarantee life insurance (primarily the Company’s Compound Rate Contract (“CRC”) and associated assets) as separate account assets and liabilities through December 31, 2003. Notwithstanding the market value adjustment feature in this product, all of the investment performance of the separate account assets is not being passed to the contractholder, and it therefore, does not meet the conditions for separate account reporting under the SOP. On January 1, 2004, market value reserves included in separate account liabilities for CRC, of $10.8 billion, were revalued at current account value in the general account to $10.1 billion. The related separate account assets of $11.0 billion were also reclassified to the general account. Fixed maturities and equity securities were reclassified to the general account, as available-for-sale securities, and will continue to be recorded at fair value, however, subsequent changes in fair value, net of amortization of deferred policy acquisition costs and income taxes, will be recorded in other comprehensive income rather than net income. On January 1, 2004, the Company recorded a cumulative effect adjustment to earnings equal to the revaluation of the liabilities from fair value to account value plus the adjustment to record unrealized gains (losses) on available-for-sale invested assets, previously recorded as a component of net income, as other comprehensive income. The cumulative adjustments to earnings and other comprehensive income were recorded net of amortization of deferred policy acquisition costs and income taxes. Through December 31, 2003, the Company had recorded CRC assets and liabilities on a market value basis with all changes in value (market value spread) included in current earnings as a component of other revenues. Since adoption of the SOP, the components of CRC spread on a book value basis are recorded in interest income and interest credited. Realized gains and losses on investments and market value adjustments on contract surrenders are recognized as incurred.

The Company had also recorded its variable annuity products offered in Japan in separate account assets and liabilities through December 31, 2003. As the separate account arrangement in Japan is not legally insulated from the general account liabilities of the Company, it does not meet the conditions for separate account reporting under the SOP. On January 1, 2004, separate account liabilities in Japan of $6.2 billion recorded at account value in the separate account, were reclassified to the general account with no change in value. The related separate account assets of $6.2 billion were also reclassified to the general account with no change in value. The investment assets were recorded at fair value in a trading securities portfolio. As of March 31, 2004, due to strong sales of Japan variable annuity products and positive performance of the Japanese equity markets these assets had grown to $7.8 billion.

Interests in Separate Accounts

As of December 31, 2003, the Company had $24 representing unconsolidated interests in its own separate accounts. These interests were recorded as available-for-sale equity securities, with changes in fair value recorded through other comprehensive income. On January 1, 2004, the Company reclassified $11 to investment in trading securities, where the Company’s proportionate beneficial interest in the separate account was less than 20%. In instances where the Company’s proportionate beneficial interest was between 20-50%, the Company reclassified $13 of its investment to reflect the Company’s proportionate interest in each of the underlying assets of the separate account. The Company has designated its proportionate interest in these equity securities and fixed maturities as available-for-sale. As of March 31, 2004, the Company had $1 of interests in separate accounts recorded as equity trading securities and $0 recorded as available-for-sale securities.

Sales Inducements

The Company currently offers enhanced crediting rates or bonus payments to contract-holders on certain of its individual and group annuity products. Through December 31, 2003, the expense associated with offering certain of these bonuses was deferred and amortized over the contingent deferred sales charge period. Others were expensed as incurred. Effective January 1, 2004, upon adopting the SOP, the expense associated with offering a bonus will be deferred and amortized over the life of the related contract in a pattern consistent with the amortization of deferred policy acquisition costs. Effective January 1, 2004, amortization

10

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Note 1. Basis of Presentation and Accounting Policies (continued)

expense associated with expenses previously deferred will be recorded over the remaining life of the contract rather than over the contingent deferred sales charge period. For the quarter ended March 31, 2004, amortization of sales inducements was $6.

Future Adoption of New Accounting Standards

In March 2004, the Emerging Issues Task Force (“EITF”) reached a final consensus on Issue 03-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments” (“EITF 03-1”). EITF 03-1 adopts a three-step impairment model for securities within its scope. The three-step model must be applied on a security-by-security basis as follows:

Step 1:	Determine whether an investment is impaired. An investment is impaired if the fair value of the investment is less than its cost basis.
Step 2:	Evaluate whether an impairment is other-than-temporary. For debt securities that cannot be contractually prepaid or otherwise settled in such a way that the investor would not recover substantially all of its cost, an impairment is deemed other-than-temporary if the investor does not have the ability and intent to hold the investment until a forecasted market price recovery or it is probable that the investor will be unable to collect all amounts due according to the contractual terms of the debt security.
Step 3:	If the impairment is other-than-temporary, recognize an impairment loss equal to the difference between the investment’s cost basis and its fair value.

Subsequent to an other-than-temporary impairment loss, a debt security should be accounted for in accordance with Statement of Position (“SOP”) 03-3, “Accounting for Loans and Certain Debt Securities Acquired in a Transfer”. EITF 03-1 does not replace the impairment guidance for investments accounted for under EITF Issue 99-20, “Recognition of Interest Income and Impairments on Purchased and Retained Beneficial Interests in Securitized Financial Assets” (“EITF 99-20”), however, investors will be required to determine if a security is other-than-temporarily impaired under EITF 03-1 if the security is determined not to be impaired under EITF 99-20. The disclosure provisions of EITF 03-1 adopted by the Company effective December 31, 2003 and included in Note 3 of Notes to Consolidated Financial Statements included in The Hartford’s 2003 Form 10-K Annual Report will prospectively include securities subject to EITF 99-20.

The impairment evaluation and recognition guidance in EITF 03-1 will be applied prospectively for all relevant current and future investments, effective in reporting periods beginning after June 15, 2004. Besides the disclosure requirements adopted by the Company effective December 31, 2003, the final version of EITF 03-1 included additional disclosure requirements that are effective for fiscal years ending after June 15, 2004. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial condition or results of operations.

In March 2004, the EITF reached a final consensus on Issue 03-16, “Accounting for Investments in Limited Liability Companies” (“EITF 03-16”). EITF 03-16 will require investors in limited liability corporations that have specific ownership accounts to follow the equity method accounting for investments that are more than minor (e.g. greater than 3% ownership interest) as prescribed in SOP 78-9, “Accounting for Investments in Real Estate Ventures” and EITF Topic No. D-46, “Accounting for Limited Partnership Investments”. Investors that do not have specific ownership accounts or minor ownership interests should follow the significant influence model prescribed in APB Opinion No. 18, “Accounting for Certain Investments in Debt and Equity Securities”, for corporate investments. EITF 03-16 excludes securities that are required to be accounted for as debt securities based on the guidance in paragraph 14 of SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”, and EITF 99-20. EITF 03-16 is effective for quarters beginning after June 15, 2004 and should be applied as a change in accounting principle. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial condition or results of operations.

Note 2. Derivatives and Hedging Activity

The Company utilizes a variety of derivative instruments, including swaps, caps, floors, forwards, futures and options designed to achieve one of four Company-approved objectives: to hedge risk arising from interest rate, price or currency exchange rate volatility; to manage liquidity; to control transaction costs; or to enter into replication transactions.

On the date the derivative contract is entered into, the Company designates the derivative as (1) a hedge of the fair value of a recognized asset or liability (“fair value” hedge), (2) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow” hedge), (3) a foreign-currency fair value or cash flow hedge (“foreign-currency” hedge), (4) a hedge of a net investment in a foreign operation or (5) held for other investment and risk management activities, which primarily involve managing asset or liability related risks which do not qualify for hedge accounting under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”.

The Company’s derivative transactions are permitted uses of derivatives under the derivatives use plan filed and/or approved, as applicable, by the State of Connecticut and the State of New York insurance departments. The Company does not make a market or trade in these instruments for the express purpose of earning short-term trading profits.

11

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Note 2. Derivatives and Hedging Activity (continued)

For a detailed discussion of the Company’s use of derivative instruments, see Notes 1 and 3 of Notes to Consolidated Financial Statements included in The Hartford’s 2003 Form 10-K Annual Report.

Due to the adoption of the SOP, derivatives previously included in separate accounts were reclassified into various other balance sheet classifications. On January 1, 2004, the notional amount and net fair value of derivative instruments reclassified totaled $2.9 billion and $(71), respectively. As of March 31, 2004, $50 of the derivatives were reported in other investments, $(93) in other liabilities, and $6 in fixed maturities in the condensed consolidated balance sheets. Management’s objective with regard to the reclassified derivatives along with the notional amount and net fair value as of March 31, 2004 are as follows:

	Notional
Hedging Strategy	Amount		Fair Value
Cash Flow Hedges
Interest rate swaps - Interest rate swaps are primarily used to convert interest receipts on floating-rate fixed maturity investments to fixed rates. These derivatives are predominantly used to better match cash receipts from assets with cash disbursements required to fund liabilities.	$	1,511	$	68
Foreign currency swaps - Foreign currency swaps are used to convert foreign denominated cash flows associated with certain foreign denominated fixed maturity investments to U.S. dollars. The foreign fixed maturities are primarily denominated in Euros and are swapped to minimize cash flow fluctuations due to changes in currency rates.		413		(98	)
Fair Value Hedges
Interest rate caps and floors - Interest rate caps and floors are used to offset the changes in fair value related to corresponding interest rate caps and floors that exist in certain of the Company’s variable-rate fixed maturity investments.		111		(3	)
Other Investment and Risk Management Activities
Credit default and total return swaps - The Company enters into swap agreements in which the Company assumes credit exposure or reduces credit exposure from an individual entity, referenced index or asset pool.		234		1
Interest rate swaps - The Company enters into interest rate swaps to economically terminate existing swaps in hedging relationships and thereby offset the changes in value in the original swap. In addition, the Company uses interest rate swaps to manage interest rate risk.		345		—
Options - The Company writes option contracts for a premium to monetize the option embedded in certain of its fixed maturity investments.		417		—
Foreign currency swaps - The Company enters into foreign currency swaps to hedge the foreign currency exposures in certain of its foreign fixed maturity investments.		13		(5	)
Total	$	3,044	$	(37	)

In addition to the derivatives transferred to the general account as a result of the adoption of the SOP, during the first quarter of 2004, the Company entered into a series of interest rate swap agreements with a combined notional value of $350, to hedge a portion of the Company’s floating rate guaranteed investment contracts. These swaps have been designated as cash flow hedges, with the objective of hedging changes in the benchmark interest rate (i.e. LIBOR), and were structured to offset the payments associated with the guaranteed investment contracts. As of March 31, 2004 the notional amount and net fair value of these swaps totaled $350 and $(7), respectively.

The Company offers certain variable annuity products with a guaranteed minimum withdrawal benefit (“GMWB”) rider. As of March 31, 2004, and December 31, 2003, $9.7 billion or 46% and $6.2 billion or 36%, respectively, of account value with the GMWB feature was unreinsured. In order to minimize the volatility associated with the unreinsured GMWB liabilities, the Company has established an alternative risk management strategy. During the third quarter of 2003, the Company began hedging its unreinsured GMWB exposure using interest rate futures, and Standard and Poor’s (“S&P”) 500 and NASDAQ index options and futures contracts. During the first quarter of 2004, the Company entered into Europe, Asia and Far East (“EAFE”) Index swaps to hedge GMWB exposure to international equity markets.

The total notional amount of derivative contracts purchased to hedge the GMWB exposure, as of March 31, 2004 and December 31, 2003, was $1.7 billion and $544, respectively, and net fair value was $100 and $21, respectively. For the quarter ended March 31, 2004, net realized capital gains and losses included the change in market value of both the embedded derivative related to the GMWB liability and the related derivative contracts that were purchased as economic hedges, the net effect of which was a $2 loss before deferred policy acquisition costs and tax effects.

Derivative instruments are recorded at fair value and presented in the condensed consolidated balance sheets as follows:

12

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Note 2. Derivatives and Hedging Activity (continued)

	March 31, 2004				December 31, 2003
	Asset		Liability		Asset		Liability
	Values		Values		Values		Values
Other investments	$	375	$	—	$	199	$	—
Reinsurance recoverables		—		73		—		89
Other policyholder funds and benefits payable		79		—		115		—
Fixed maturities		15		—		7		—
Other liabilities		—		342		—		303
Total	$	469	$	415	$	321	$	392

The increase in the asset values of derivative instruments since December 31, 2003 was primarily due to derivatives transferred to the general account pursuant to the adoption of the SOP, the increase in derivatives used to hedge GMWB exposure and market appreciation associated with interest rate swaps due to a decrease in interest rates.

The following table summarizes the notional amount and fair value of derivatives by hedge designation as of March 31, 2004 and December 31, 2003. The notional amount of derivative contracts represents the basis upon which pay or receive amounts are calculated and are not reflective of credit risk. The fair value amounts of derivative assets and liabilities are presented on a net basis in the following table.

	March 31, 2004					December 31, 2003
	Notional					Notional
	Amount		Fair Value			Amount		Fair Value
Cash flow hedge	$	5,999	$	(80	)	$	3,659	$	(84	)
Fair value hedge		1,023		18			956		4
Net investment hedge		200		(9	)		200		(4	)
Other investment and risk management activities		38,581		125			30,989		13
Total	$	45,803	$	54		$	35,804	$	(71	)

For the quarters ended March 31, 2004 and March 31, 2003, the Company’s gross gains and losses representing the total ineffectiveness of all cash flow, fair value and net investment hedges were immaterial, with the net impact reported as net realized capital gains and losses.

For the quarters ended March 31, 2004 and 2003, the Company recognized an after-tax net gain (loss) of $17 and $(3), respectively, (reported as net realized capital gains and losses in the condensed consolidated statements of operations), which represented the total change in value for other derivative-based strategies which do not qualify for hedge accounting treatment, including the periodic net coupon settlements.

As of March 31, 2004, the after-tax deferred net gains on derivative instruments accumulated in accumulated other comprehensive income (“AOCI”) that are expected to be reclassified to earnings during the next twelve months are $15. This expectation is based on the anticipated interest payments on hedged investments in fixed maturity securities that will occur over the next twelve months, at which time the Company will recognize the deferred net gains (losses) as an adjustment to interest income over the term of the investment cash flows. The maximum term over which the Company is hedging its exposure to the variability of future cash flows (for all forecasted transactions, excluding interest payments on variable rate fixed maturities) is twenty-four months. For the quarters ended March 31, 2004 and 2003, the net reclassifications from AOCI to earnings resulting from the discontinuance of cash flow hedges were immaterial.

The net investment hedge of the Japanese Life operation was established in the fourth quarter of 2003. The after-tax amount of net gain (loss) included in the foreign currency cumulative translation adjustment associated with the net investment hedge was $(6) and $(3) as of March 31, 2004 and December 31, 2003, respectively.

Note 3. Goodwill and Other Intangible Assets

Effective January 1, 2002, the Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets”, and accordingly ceased all amortization of goodwill.

The carrying amount of goodwill as of March 31, 2004 and December 31, 2003, is shown below.

Life	$	796
Property & Casualty		152
Corporate		772
Total	$	1,720

13

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

     Note 3. Goodwill and Other Intangible Assets (continued)

The following table shows the Company’s acquired intangible assets that continue to be subject to amortization and accumulated amortization expense. Except for goodwill, the Company has no intangible assets with indefinite useful lives.

	March 31, 2004				December 31, 2003
	Gross		Accumulated		Gross		Accumulated
	Carrying		Net		Carrying		Net
Amortized Intangible Assets	Amount		Amortization		Amount		Amortization
Present value of future profits	$	1,459	$	408	$	1,459	$	380
Renewal rights		30		18		30		17
Other		11		2		11		1
Total	$	1,500	$	428	$	1,500	$	398

Net amortization expense for the quarter ended March 31, 2004 and 2003 was $30 and $26, respectively.

Estimated future net amortization expense for the succeeding five years is as follows:

For the year ended December 31,
2004	$	124
2005	$	104
2006	$	95
2007	$	80
2008	$	69

The following is detail of the net acquired intangible asset activity as of March 31, 2004 and 2003:

	Present Value
	of Future		Renewal
	Profits		Rights		Other		Total
For the quarter ended March 31, 2004
Balance, beginning of period	$	1,079	$	13	$	10	$	1,102
Amortization, net of the accretion of interest		28		1		1		30
Balance, ending of period	$	1,051	$	12	$	9	$	1,072
For the quarter ended March 31, 2003
Balance, beginning of period	$	1,132	$	15	$	—	$	1,147
Acquisition of business		—		4		9		13
Amortization, net of the accretion of interest		24		2		—		26
Balance, ending of period	$	1,108	$	17	$	9	$	1,134

Note 4. Earnings (Loss) Per Share

The following tables present a reconciliation of net income (loss) and shares used in calculating basic earnings (loss) per share to those used in calculating diluted earnings (loss) per share.

	Net
March 31, 2004	Income/(Loss)		Shares		Per Share Amount
Basic Earnings per Share
Net income available to common shareholders	$	568		289.9	$	1.96
Diluted Earnings per Share
Options		—		3.1
Equity Units		—		1.9
Net income available to common shareholders plus assumed conversions	$	568		294.9	$	1.93

14

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Note 4. Earnings (Loss) Per Share (continued)

March 31, 2003
Basic Loss per Share
Net loss available to common shareholders	$	(1,395	)	255.4	$	(5.46	)
Diluted Loss per Share [1]
Options		—		—
Net loss available to common shareholders plus assumed conversions	$	(1,395	)	255.4	$	(5.46	)

[1] As a result of the net loss in the quarter ended March 31, 2003, SFAS No. 128 requires the Company to use basic weighted average shares outstanding in the calculation of first quarter 2003 diluted earnings per share, as the inclusion of options of 0.7 would have been antidilutive to the earnings per share calculation. In the absence of the net loss, weighted average common shares outstanding and dilutive potential common shares would have totaled 256.1.

Basic earnings (loss) per share reflects the actual weighted average number of shares outstanding during the period. Diluted earnings (loss) per share includes the dilutive effect of outstanding options and equity units, using the treasury stock method. Under the treasury stock method exercise of options and equity units are assumed, with the proceeds used to purchase common stock at the average market price for the period. The equity units are reflected in diluted earnings per share during periods where the average market price of the Company’s common stock exceeds the applicable appreciation threshold. For a discussion of the Company’s equity units, see Note 8 of Notes to Consolidated Financial Statements included in The Hartford’s 2003 10-K Annual Report.

Note 5. Commitments and Contingencies

Litigation

The Hartford is involved in claims litigation arising in the ordinary course of business, both as a liability insurer defending third-party claims brought against insureds and as an insurer defending coverage claims brought against it. The Hartford accounts for such activity through the establishment of unpaid claim and claim adjustment expense reserves. Subject to the uncertainties discussed in Note 16 of Notes to Consolidated Financial Statements under the caption “Asbestos and Environmental Claims”, included in The Hartford’s 2003 Form 10-K Annual Report, management expects that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and costs of defense, will not be material to the consolidated financial condition, results of operations or cash flows of The Hartford.

The Hartford is also involved in other kinds of legal actions, some of which assert claims for substantial amounts. These actions include, among others, putative state and federal class actions seeking certification of a state or national class. Such putative class actions have alleged, for example, underpayment of claims or improper underwriting practices in connection with various kinds of insurance policies, such as personal and commercial automobile, premises liability and marine, and improper sales practices in connection with the sale of life insurance and other investment products. The Hartford also is involved in individual actions in which punitive damages are sought, such as claims alleging bad faith in the handling of insurance claims. Management expects that the ultimate liability, if any, with respect to such lawsuits, after consideration of provisions made for potential losses and costs of defense, will not be material to the consolidated financial condition of The Hartford. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s consolidated results of operations or cash flows in particular quarterly or annual periods.

As discussed in Note 16 of Notes to Consolidated Financial Statements under the caption “Asbestos and Environmental Claims”, included in The Hartford’s 2003 Form 10-K Annual Report, The Hartford continues to receive asbestos and environmental claims that involve significant uncertainty regarding policy coverage issues. Regarding these claims, The Hartford continually reviews its overall reserve levels, methodologies and reinsurance coverages. Because of the significant uncertainties which limit the ability of insurers and reinsurers to estimate the ultimate reserves necessary for unpaid losses and related expenses, principally those related to asbestos, the ultimate liabilities may exceed the currently recorded reserves. Any such additional liability (or any range of additional amounts) cannot be reasonably estimated now but could be material to The Hartford’s future consolidated operating results, financial condition and liquidity.

The MacArthur Litigation – On December 19, 2003, Hartford Accident and Indemnity Company (“Hartford A&I”) entered into a conditional settlement to resolve all claims relating to general liability policies that Hartford A&I issued to Mac Arthur Company and its subsidiary, Western MacArthur Company, both former regional distributors of asbestos products (collectively or individually, “MacArthur”), during the period 1967 to 1976. MacArthur had filed a pre-negotiated bankruptcy and plan of reorganization in November 2002 pursuant to a settlement with another of its insurers, United States Fidelity and Guaranty Company. The Hartford settlement was contingent on the occurrence of certain conditions, including the entry of final, non-appealable court orders approving the settlement agreement and confirming a bankruptcy plan under which, among other things, all claims against the Company relating to the asbestos liability of MacArthur would be enjoined. Under the settlement agreement, Hartford A&I paid $1.15 billion into an escrow account in the first quarter of 2004, pending the occurrence of the conditions. On April 22, 2004, all conditions to the settlement were satisfied, and the escrowed funds were disbursed to a trust established for the benefit of present and future asbestos claimants pursuant to the bankruptcy plan. The completion by the Company of the settlement resolves all disputes concerning

15

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Note 5. Commitments and Contingencies (continued)

Hartford A&I’s alleged obligations from MacArthur’s asbestos liability.

Bancorp Services, LLC – In the third quarter of 2003, Hartford Life Insurance Company and its affiliate International Corporate Marketing Group, LLC settled their intellectual property dispute with Bancorp Services, LLC (“Bancorp”). The dispute concerned, among other things, Bancorp’s claims for alleged patent infringement, breach of a confidentiality agreement, and misappropriation of trade secrets related to certain stable value corporate-owned life insurance products. The settlement provided that The Hartford would pay a minimum of $70 and a maximum of $80, depending on the outcome of the patent appeal, to resolve all disputes between the parties. The settlement resulted in the recording of an additional charge of $40, after-tax, in the third quarter of 2003, reflecting the maximum amount payable under the settlement, and in November of 2003, The Hartford paid the initial $70 of the settlement. On March 1, 2004, the Federal Circuit Court of Appeals decided the patent appeal adversely to The Hartford, and on March 22, 2004, The Hartford paid Bancorp an additional $10 in full and final satisfaction of its obligations under the settlement. Because the charge taken in the third quarter of 2003 reflected the maximum amount payable under the settlement, the amount paid in the first quarter of 2004 had no effect on the Company’s results of operations.

Regulatory Developments

There continues to be significant federal and state regulatory activity relating to financial services companies, particularly mutual funds companies. These regulatory inquiries have focused on a number of mutual fund issues. The Company has received requests for information and subpoenas from the Securities and Exchange Commission (“SEC”), a subpoena from the New York Attorney General’s Office, and requests for information from the Connecticut Securities and Investments Division of the Department of Banking, in each case requesting documentation and other information regarding various mutual fund regulatory issues. Representatives from the SEC’s Office of Compliance Inspections and Examinations continue to request documents and information in connection with their ongoing compliance examination. In addition, the SEC’s Division of Enforcement has commenced an investigation of the Company’s variable annuity and mutual fund operations. The Company continues to cooperate fully with the SEC and other regulatory agencies.

The Company’s mutual funds are available for purchase by the separate accounts of different variable life insurance policies, variable annuity products, and funding agreements, and they are offered directly to certain qualified retirement plans. Although existing products contain transfer restrictions between subaccounts, some products, particularly older variable annuity products, do not contain restrictions on the frequency of transfers. In addition, as a result of the settlement of litigation against the Company with respect to certain owners of older variable annuity products, the Company’s ability to restrict transfers by these owners is limited.

A number of companies have announced settlements of enforcement actions with various regulatory agencies, primarily the SEC and the New York Attorney General’s Office. While no such action has been initiated against the Company, it is possible that the SEC or one or more other regulatory agencies may pursue action against the Company in the future. If such an action is brought, it could have a material effect on the Company.

Tax Matters

The Hartford’s federal income tax returns are routinely audited by the Internal Revenue Service (“IRS”). The Company is currently under audit for the 1998–2001 tax years. Management believes that adequate provision has been made in the financial statements for any potential assessments that may result from tax examinations and other tax-related matters for all open tax years.

Although there has been no agreement reached between the Company and the IRS at this time, the amount of tax related to the separate account dividends-received deduction (“DRD”) that is under discussion for all open tax years could result in a benefit to the Company’s future results of operations. There can be no assurances that such an agreement will be reached. (For further discussion of the Company’s separate account DRD, see Note 16 of Notes to Consolidated Financial Statements included in The Hartford’s 2003 Form 10-K Annual Report.)

Note 6. Segment Information

The Hartford is organized into two major operations: Life and Property & Casualty. In the quarter ended March 31, 2004, and as more fully described below, the Company changed its reporting segments to reflect the current manner by which its chief operating decision maker views and manages the business. All segment data for prior reporting periods have been adjusted to reflect the current segment reporting. Within the Life and Property & Casualty operations, The Hartford conducts business principally in eight operating segments. Additionally, Corporate now includes all of the Company’s debt financing and related interest expense, as well as certain capital raising and purchase accounting adjustment activities.

Life has changed its reportable operating segments from Investment Products, Individual Life, Group Benefits and Corporate Owned Life Insurance (“COLI”) to Retail Products Group (“Retail”), Institutional Solutions Group (“Institutional”), Individual Life and Group Benefits. Retail offers individual variable and fixed annuities, mutual funds, retirement plan products and services to corporations under Section 401(k) plans and other investment products. Institutional primarily offers retirement plan products and services to municipalities under Section 457 plans, other institutional investment products and private placement life insurance. Individual Life sells a variety of life insurance products, including variable universal life, universal life, interest sensitive whole life and term life insurance. Group Benefits sells group insurance products, including group life and group disability insurance as well as other products, including medical stop loss and supplementary medical coverages to employers and employer sponsored plans, accidental death and

16

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Note 6. Segment Information (continued)

dismemberment, travel accident and other special risk coverages to employers and associations. Life also includes in an Other category its international operations, which are primarily located in Japan and Brazil; net realized capital gains and losses other than periodic net coupon settlements on non-qualifying derivatives and net realized capital gains and losses related to guaranteed minimum withdrawal benefits; corporate items not directly allocated to any of its reportable operating segments; and intersegment eliminations. Periodic net coupon settlements on non-qualifying derivatives and net realized capital gains and losses related to guaranteed minimum withdrawal benefits are reflected in each applicable segment in net realized capital gains and losses.

Property & Casualty is now organized into four reportable operating segments: the underwriting segments of Business Insurance, Personal Lines, and Specialty Commercial (collectively “Ongoing Operations”); and the Other Operations segment. Prior to the segment reporting change made in the first quarter of 2004, Property and Casualty had also included a Reinsurance segment. With the discontinuance of writing new reinsurance assumed business, the reinsurance assumed business is now included in the Other Operations segment.

Business Insurance provides standard commercial insurance coverage to small commercial and middle market commercial business primarily throughout the United States. This segment offers workers’ compensation, property, automobile, liability, umbrella and marine coverages. Commercial risk management products and services are also provided.

Personal Lines provides automobile, homeowners’ and home-based business coverages to the members of AARP through a direct marketing operation; to individuals who prefer local agent involvement through a network of independent agents in the standard personal lines market; and through the Omni Insurance Group in the non-standard automobile market. Personal Lines also operates a member contact center for health insurance products offered through AARP’s Health Care Options.

The Specialty Commercial segment offers a variety of customized insurance products and risk management services. Specialty Commercial provides standard commercial insurance products including workers’ compensation, automobile and liability coverages to large-sized companies. Specialty Commercial also provides bond, professional liability, specialty casualty and agricultural coverages, as well as core property and excess and surplus lines coverages not normally written by standard lines insurers. Alternative markets, within Specialty Commercial, provides insurance products and services primarily to captive insurance companies, pools and self-insurance groups. In addition, Specialty Commercial provides third party administrator services for claims administration, integrated benefits, loss control and performance measurement through Specialty Risk Services, a subsidiary of the Company.

The Other Operations segment consists of certain property and casualty insurance operations of The Hartford which have discontinued writing new business and includes substantially all of the Company’s asbestos and environmental exposures.

The measure of profit or loss used by The Hartford’s management in evaluating the performance of its Life segments is net income. The Property & Casualty underwriting segments are evaluated by The Hartford’s management primarily based upon underwriting results. Underwriting results represent premiums earned less incurred claims, claim adjustment expenses and underwriting expenses.

The following tables present revenues and net income (loss). Underwriting results are presented for the Business Insurance, Personal Lines, Specialty Commercial and Other Operations segments, while net income is presented for Life, Property & Casualty and Corporate. Segment information for the previous period has been restated to reflect the change in composition of reportable operating segments.

17

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Note 6. Segment Information (continued)

	First Quarter Ended
	March 31,
	2004		2003
Revenues
Life
Retail Products Group	$	763	$	478
Institutional Solutions Group		442		422
Individual Life		254		244
Group Benefits		1,004		667
Other [1] [2]		595		(25	)
Total Life		3,058		1,786
Property & Casualty
Ongoing Operations
Earned premiums and other revenues
Business Insurance		1,019		880
Personal Lines		864		800
Specialty Commercial		395		422
Total Ongoing Operations earned premiums and other revenues		2,278		2,102
Other Operations earned premiums		12		159
Net investment income		311		281
Net realized capital gains (losses)		71		(1	)
Total Property & Casualty		2,672		2,541
Corporate		2		4
Total revenues	$	5,732	$	4,331

[1]	Amounts include net realized capital gains (losses) of $75 and $(48) for the first quarters ended March 31, 2004 and 2003, respectively.
[2]	With the adoption of SOP 03-1, certain annuity products were required to be accounted for in the general account. This change in accounting resulted in an increase in net investment income.

	First Quarter Ended
	March 31,
	2004			2003
Net Income (Loss)
Life
Retail Products Group	$	107		$	77
Institutional Solutions Group		28			31
Individual Life		33			32
Group Benefits		47			34
Other [1]		66			(29	)
Total Life		281			145
Property & Casualty
Ongoing Operations
Underwriting results
Business Insurance		225			7
Personal Lines		106			56
Specialty Commercial		(110	)		5
Total Ongoing Operations underwriting results		221			68
Other Operations underwriting results [2]		(65	)		(2,651	)
Total Property & Casualty underwriting results		156			(2,583	)
Net servicing and other income [3]		9			3
Net investment income		311			281
Other expenses		(68	)		(41	)
Net realized capital gains (losses)		71			(1	)
Income tax (expense) benefit		(138	)		846
Total Property & Casualty		341			(1,495	)
Corporate		(54	)		(45	)
Net income (loss)	$	568		$	(1,395	)

[1]	Amounts include net realized capital gains (losses) after-tax, of $49 and $(31) for the first quarters ended March 31, 2004 and 2003, respectively.
[2]	Includes $2,604 in 2003 of before-tax impact of asbestos reserve addition.
[3]	Net of expenses related to service business.

18

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Note 7. Debt

Short-Term Debt	March 31, 2004		December 31, 2003
Commercial paper	$	373	$	850
Current maturities of long-term debt		200		200
Total Short-Term Debt	$	573	$	1,050

Long –Term Debt [1]	March 31, 2004		December 31, 2003
Senior Notes and Debentures
7.75% Notes, due 2005	$	249	$	249
2.375% Notes, due 2006		254		252
7.1% Notes, due 2007		198		198
4.7% Notes, due 2007		300		300
6.375% Notes, due 2008		200		200
4.1% Equity Units Notes, due 2008		330		330
2.56% Equity Units Notes, due 2008		690		690
7.9% Notes, due 2010		275		275
4.625% Notes, due 2013		319		319
4.75% Notes, due 2014		199		—
7.3% Notes, due 2015		200		200
7.65% Notes, due 2027		248		248
7.375% Notes, due 2031		400		400
Total Senior Notes and Debentures	$	3,862	$	3,661
Junior Subordinated Debentures
7.20% Notes, due 2038		—		245
7.625% Notes, due 2050		200		200
7.45% Notes, due 2050		518		507
Total Junior Subordinated Debentures		718		952
Total Long-Term Debt	$	4,580	$	4,613

[1] The Hartford’s long-term debt securities are issued by either The Hartford Financial Services Group, Inc. (“HFSG”) or HLI and are unsecured obligations of HFSG or HLI and rank on a parity with all other unsecured and unsubordinated indebtedness of HFSG or HLI.

On March 9, 2004, the Company issued 4.75% senior notes due March 1, 2014, and received net proceeds of $197. Interest on the notes is payable semi-annually on March 1 and September 1, commencing on September 1, 2004.

On March 15, 2004, HLI redeemed $250 of its 7.2% junior subordinated debentures underlying the trust preferred securities issued by Hartford Life Capital 1.

Shelf Registrations

On December 3, 2003, The Hartford’s shelf registration statement (Registration No. 333-108067) for the potential offering and sale of debt and equity securities in an aggregate amount of up to $3.0 billion was declared effective by the SEC. The Registration Statement allows for the following types of securities to be offered (i) debt securities, preferred stock, common stock, depositary shares, warrants, stock purchase contracts, stock purchase units and junior subordinated deferrable interest debentures of the Company, and (ii) preferred securities of any of one or more capital trusts organized by The Hartford (“The Hartford Trusts”). The Company may enter into guarantees with respect to the preferred securities of any of The Hartford Trusts. As of March 31, 2004, The Hartford had $2.4 billion remaining on its shelf.

On May 15, 2001, HLI filed with the SEC a shelf registration statement for the potential offering and sale of up to $1.0 billion in debt and preferred securities. The registration statement was declared effective on May 29, 2001. As of March 31, 2004, HLI had $1.0 billion remaining on its shelf.

Junior Subordinated Debentures

The Hartford and its subsidiary HLI have formed statutory business trusts which exist for the exclusive purposes of (i) issuing Trust Securities representing undivided beneficial interests in the assets of the Trust; (ii) investing the gross proceeds of the Trust Securities in Junior Subordinated Deferrable Interest Debentures (“Junior Subordinated Debentures”) of The Hartford or HLI; and (iii) engaging in only those activities necessary or incidental thereto. The Company may enter into guarantees with respect to the preferred securities of any of The Hartford Trusts.

19

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Note 7. Debt (continued)

Commercial Paper and Revolving Credit Facilities

							Outstanding as of
	Effective		Expiration		Maximum		March 31,		December 31,
Description	Date		Date		Available		2004		2003
Commercial Paper
The Hartford		11/10/86		N/A	$	2,000	$	373	$	850
HLI		2/7/97		N/A		250		—		—
Total commercial paper					$	2,250	$	373	$	850
Revolving Credit Facility
5-year revolving credit facility		6/20/01		6/20/06	$	1,000	$	—	$	—
3-year revolving credit facility		12/31/02		12/31/05		490		—		—
Total revolving credit facility					$	1,490	$	—	$	—
Total Outstanding Commercial Paper and Revolving Credit Facilities					$	3,740	$	373	$	850

Interest Expense

The following table presents interest expense incurred for the quarters ended March 31, 2004 and 2003, respectively.

	First Quarter Ended
	March 31,
	2004		2003
Short-term debt	$	2	$	1
Long-term debt		64		65
Total interest expense	$	66	$	66

Note 8. Stockholders’ Equity

On January 22, 2004, The Hartford issued approximately 6.3 million shares of common stock pursuant to an underwritten offering at a price to the public of $63.25 per share and received net proceeds of $388. Subsequently, on January 30, 2004, The Hartford issued approximately 377 thousand shares of common stock at a price to the public of $63.25 per share and received net proceeds of $23. The Company used the proceeds from these issuances to repay $411 of commercial paper issued in connection with the acquisition of the group life and accident, and short-term and long-term disability business of CNA Financial Corporation. (For further discussion of this acquisition, see Note 18 of Notes to Consolidated Financial Statements included in The Hartford’s 2003 Form 10-K Annual Report.)

Note 9. Pension Plans and Postretirement Health Care and Life Insurance Benefit Plans

Components of Net Periodic Benefit Cost

Total net periodic benefit cost for the quarters ended March 31, 2004 and 2003 include the following components:

							Other Postretirement
	Pension Benefits						Benefits
	2004			2003			2004			2003
Service cost	$	26		$	26		$	4		$	3
Interest cost		43			42			7			7
Expected return on plan assets		(43	)		(42	)		(2	)		(2	)
Amortization of prior service cost		1			1			(6	)		(6	)
Amortization of unrecognized net losses		7			6			2			1
Net periodic benefit cost	$	34		$	33		$	5		$	3

Employer Contributions

There were no employer contributions paid during the quarter ended March 31, 2004. On April 15, 2004, the Company made a $312 voluntary contribution into its U.S. qualified defined benefit pension plan. No additional contributions are expected to be made in 2004.

Note 10. Accumulated Other Comprehensive Income

Comprehensive income is defined as all changes in stockholders’ equity, except those arising from transactions with stockholders. Comprehensive income includes net income (loss) and other comprehensive income (loss), which for the Company consists of changes in unrealized appreciation or depreciation of investments carried at market value, changes in gains or losses on cash flow hedging instruments, changes in foreign currency translation gains or losses and changes in the Company’s minimum pension liability.

20

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Note 10. Accumulated Other Comprehensive Income (continued)

The components of AOCI, net of tax, were as follows:

						Foreign
						Currency
			Net Gain (Loss) on			Cumulative			Minimum Pension			Accumulated Other
	Unrealized Gain		Cash flow Hedging			Translation			Liability			Comprehensive
For the first quarter ended March 31, 2004	on Securities		Instruments			Adjustments			Adjustment			Income
Balance, beginning of period	$	1,764	$	(42	)	$	(101	)	$	(375	)	$	1,246
Unrealized gain/loss on securities [1] [2]		574		—			—			—			574
Foreign currency translation adjustments		—		—			(3	)		—			(3	)
Net gain/loss on cash flow hedging instruments [1] [3]		—		59			—			—			59
Cumulative effect of accounting change [4]		292		—			—			—			292
Balance, end of period	$	2,630	$	17		$	(104	)	$	(375	)		2,168
For the first quarter ended March 31, 2003
Balance, beginning of period	$	1,444	$	128		$	(95	)	$	(383	)	$	1,094
Unrealized gain/loss on securities [1] [2]		177		—			—			—			177
Foreign currency translation adjustments		—		—			9			—			9
Net gain/loss on cash flow hedging instruments [1] [3]		—		(23	)		—			—			(23	)
Balance, end of period	$	1,621	$	105		$	(86	)	$	(383	)	$	1,257

[1]	Unrealized gain on securities is net of tax and other items of $276 and $131 for the first quarters ended March 31, 2004 and 2003, respectively. Net gain on cash flow hedging instruments is net of tax expense (benefit) of $32 and $(12) for the first quarters ended March 31, 2004 and 2003, respectively.
[2]	Net of reclassification adjustment for gains (losses) realized in net income of $83 and $(31) for the first quarters ended March 31, 2004 and 2003, respectively.
[3]	Net of amortization adjustment of $4 and $9 to net investment income for the first quarters ended March 31, 2004 and 2003, respectively.
[4]	Cumulative effect of accounting change is net of tax of $157 for the first quarter ended March 31, 2004.

21

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollar amounts in millions except share data unless otherwise stated)

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) addresses the financial condition of The Hartford Financial Services Group, Inc. and its subsidiaries (collectively, “The Hartford” or the “Company”) as of March 31, 2004, compared with December 31, 2003, and its results of operations for the first quarter ended March 31, 2004, compared to the equivalent 2003 period. This discussion should be read in conjunction with the MD&A in The Hartford’s 2003 Form 10-K Annual Report.

Certain of the statements contained herein are forward-looking statements. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include estimates and assumptions related to economic, competitive and legislative developments. These forward-looking statements are subject to change and uncertainty which are, in many instances, beyond the Company’s control and have been made based upon management’s expectations and beliefs concerning future developments and their potential effect upon the Company. There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on The Hartford will be those anticipated by management. Actual results could differ materially from those expected by the Company, depending on the outcome of various factors. These factors include: the difficulty in predicting the Company’s potential exposure for asbestos and environmental claims and related litigation; the possible occurrence of terrorist attacks; the response of reinsurance companies under reinsurance contracts and the availability, pricing and adequacy of reinsurance to protect the Company against losses; changes in the stock markets, interest rates or other financial markets, including the potential effect on the Company’s statutory capital levels; the inability to effectively mitigate the impact of equity market volatility on the Company’s financial position and results of operations arising from obligations under annuity product guarantees; the uncertain effect on the Company of the Jobs and Growth Tax Relief Reconciliation Act of 2003, in particular the reduction in tax rates on long-term capital gains and most dividend distributions; the possibility of more unfavorable loss experience than anticipated; the incidence and severity of catastrophes, both natural and man-made; stronger than anticipated competitive activity; unfavorable judicial or legislative developments, including the possibility that the Terrorism Risk Insurance Act of 2002 is not extended beyond 2005; the potential effect of domestic and foreign regulatory developments, including those which could increase the Company’s business costs and required capital levels; the possibility of general economic and business conditions that are less favorable than anticipated; the Company’s ability to distribute its products through distribution channels, both current and future; the uncertain effects of emerging claim and coverage issues; the effect of assessments and other surcharges for guaranty funds and second-injury funds and other mandatory pooling arrangements; a downgrade in the Company’s claims-paying, financial strength or credit ratings; the ability of the Company’s subsidiaries to pay dividends to the Company; and other factors described in such forward-looking statements.

INDEX

Critical Accounting Estimates	22
Consolidated Results of Operations	23
Life	25
Retail Products Group	26
Institutional Solutions Group	27
Individual Life	28
Group Benefits	28
Property & Casualty	29
Business Insurance	32
Personal Lines	33
Specialty Commercial	34
Other Operations (Including Asbestos and Environmental Claims)	35
Investments	39
Investment Credit Risk	43
Capital Markets Risk Management	47
Capital Resources and Liquidity	48
Accounting Standards	52

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The Company has identified the following estimates as critical in that they involve a higher degree of judgment and are subject to a significant degree of variability: reserves for future policy benefits and unpaid claim and claim adjustment expenses; Life operations deferred policy acquisition costs and present value of future profits; investments; pension and other postretirement benefits; and commitments and contingencies. In developing these estimates management makes subjective and complex judgments that are inherently uncertain and subject to material change as facts and circumstances develop. Although variability is inherent in these estimates, management believes the amounts provided are appropriate based upon the facts available upon compilation of the financial statements.

Deferred Policy Acquisition Costs and Present Value of Future Profits

Life

Policy acquisition costs, which include commissions and certain other expenses that vary with and are primarily associated with

22

acquiring business, are deferred and amortized over the estimated lives of the contracts, usually 20 years. These deferred costs, together with the present value of future profits of acquired business, are recorded as an asset commonly referred to as deferred policy acquisition costs and present value of future profits (“DAC”). At March 31, 2004 and December 31, 2003, the carrying value of the Company’s Life operations’ DAC was $6.5 billion and $6.6 billion, respectively. For statutory accounting purposes, such costs are expensed as incurred.

The Company has developed sophisticated modeling capabilities to evaluate its DAC asset, which allowed it to run a large number of stochastically determined scenarios of separate account fund performance. These scenarios were then utilized to calculate a statistically significant range of reasonable estimates of gross profits or “EGPs”. This range was then compared to the present value of EGPs currently utilized in the DAC amortization model. As of March 31, 2004, the present value of the EGPs utilized in the DAC amortization model fall within a reasonable range of statistically calculated present value of EGPs. As a result, the Company does not believe there is sufficient evidence to suggest that a revision to the EGPs (and therefore, a revision to the DAC) as of March 31, 2004 is necessary; however, if in the future the EGPs utilized in the DAC amortization model were to exceed the margin of the reasonable range of statistically calculated EGPs, a revision could be necessary. Furthermore, the Company has estimated that the present value of the EGPs is likely to remain within a reasonable range if overall separate account returns decline by 15% or less for 2004, and if certain other assumptions that are implicit in the computations of the EGPs are achieved.

Additionally, the Company continues to perform analyses with respect to the potential impact of a revision to future EGPs. If such a revision to EGPs were deemed necessary, the Company would adjust, as appropriate, all of its assumptions for products accounted for in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 97, “Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments”, and reproject its future EGPs based on current account values at the end of the quarter in which a revision is deemed to be necessary. To illustrate the effects of this process, assume the Company had concluded that a revision of the Company’s EGPs was required at March 31, 2004. If the Company assumed a 9% average long-term rate of growth from March 31, 2004 forward along with other appropriate assumption changes in determining the revised EGPs, the Company estimates the cumulative increase to amortization would be approximately $40-$45, after-tax. If instead the Company were to assume a long-term growth rate of 8% in determining the revised EGPs, the adjustment would be approximately $60-$70, after-tax. Assuming that such an adjustment were to have been required, the Company anticipates that there would have been immaterial impacts on its DAC amortization for the 2004 and 2005 years exclusive of the adjustment, and that there would have been positive earnings effects in later years. Any such adjustment would not affect statutory income or surplus, due to the prescribed accounting for such amounts that is discussed above.

The overall recoverability of the DAC asset is dependent on the future profitability of the business. The Company tests the aggregate recoverability of the DAC asset by comparing the amounts deferred to the present value of total EGPs. In addition, the Company routinely stress tests its DAC asset for recoverability against severe declines in its separate account assets, which could occur if the equity markets experienced another significant sell-off, as the majority of policyholders’ funds in the separate accounts is invested in the equity market. As of March 31, 2004, the Company believed variable annuity separate account assets could fall by at least 45% before portions of its DAC asset would be unrecoverable.

Other Critical Accounting Estimates

There have been no material changes to the Company’s critical accounting estimates regarding reserves for future policy benefits and unpaid claims and claim adjustment expenses; investments; pension and other postretirement benefits; and contingencies since the filing of the Company’s 2003 Form 10-K Annual Report.

CONSOLIDATED RESULTS OF OPERATIONS

Operating Summary

	First Quarter Ended
				March 31,
	2004			2003			Change
Earned premiums	$	3,181		$	2,849			12	%
Fee income		786			617			27	%
Net investment income		1,517			788			93	%
Other revenues		104			122			(15	%)
Net realized capital gains (losses)		144			(45	)	NM
Total revenues		5,732			4,331			32	%
Benefits, claims and claim adjustment expenses		3,297			5,245			(37	%)
Amortization of deferred policy acquisition costs and present value of future profits		679			564			20	%
Insurance operating costs and expenses		692			538			29	%
Interest expense		66			66			—
Other expenses		180			143			26	%
Total benefits, claims and expenses		4,914			6,556			(25	%)
Income (loss) before income taxes and cumulative effect of accounting change		818			(2,225	)	NM
Income tax expense (benefit)		227			(830	)	NM
Income (loss) before cumulative effect of accounting change		591			(1,395	)	NM
Cumulative effect of accounting change, net of tax		(23	)		—		NM
Net income (loss)	$	568		$	(1,395	)	NM

23

The Hartford defines “NM” as not meaningful for increases or decreases greater than 200%, or changes from a net gain to a net loss position, or vice versa.

Operating Results

Net income increased $2.0 billion, due primarily to $1.7 billion, after-tax, in reserve strengthening resulting from the completion of the Company’s asbestos reserve study in the first quarter of 2003. The remaining difference, an increase of $262, was primarily the result of an increase in net realized capital gains, after-tax, of $124; improved underwriting results in the Business Insurance and Personal Lines segments; and an increase in net income in the Retail Products Group and Group Benefits segments; partially offset by a $23 net of tax cumulative effect of accounting change charge resulting from the adoption of Statement of Position 03-1, “Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts” (the “SOP”, or “SOP 03-1”).

Revenues for the first quarter ended March 31, 2004 increased $1.4 billion over the comparable prior year period, primarily due to the adoption of the SOP, which resulted in an additional $656 in net investment income ($495 related to trading securities income and $154 related to income earned on separate account assets reclassified to the general account as a result of the adoption of the SOP). Also contributing to the increase was a $313 increase in earned premiums in the Group Benefits segment, a $189 increase in net realized capital gains, and a $142 increase in fee income and other in the Retail Products Group segment.

Income Taxes

The effective tax rate for the first quarter ended March 31, 2004 was 28% compared with 37% for the comparable period in 2003. Tax-exempt interest earned on invested assets and the dividends received deduction were the principal causes of the effective tax rates being different than the 35% U.S. statutory rate.

Organizational Structure

The Hartford is organized into two major operations: Life and Property & Casualty. In the quarter ended March 31, 2004, and as more fully described below, the Company changed its reporting segments to reflect the current manner by which its chief operating decision maker views and manages the business. All segment data for prior reporting periods have been adjusted to reflect the current segment reporting. Within the Life and Property & Casualty operations, The Hartford conducts business principally in eight operating segments. Additionally, Corporate now includes all of the Company’s debt financing and related interest expense, as well as certain capital raising and purchase accounting adjustment activities.

Life has changed its reportable operating segments from Investment Products, Individual Life, Group Benefits and Corporate Owned Life Insurance (“COLI”) to Retail Products Group (“Retail”), Institutional Solutions Group (“Institutional”), Individual Life and Group Benefits. Retail offers individual variable and fixed annuities, mutual funds, retirement plan products and services to corporations under Section 401(k) plans and other investment products. Institutional primarily offers retirement plan products and services to municipalities under Section 457 plans, other institutional investment products and private placement life insurance. Individual Life sells a variety of life insurance products, including variable universal life, universal life, interest sensitive whole life and term life insurance. Group Benefits sells group insurance products, including group life and group disability insurance as well as other products, including medical stop loss and supplementary medical coverages to employers and employer sponsored plans, accidental death and dismemberment, travel accident and other special risk coverages to employers and associations. Life also includes, in an Other category, its international operations, which are primarily located in Japan and Brazil; net realized capital gains and losses other than periodic net coupon settlements on non-qualifying derivatives and net realized capital gains and losses related to guaranteed minimum withdrawal benefits; corporate items not directly allocated to any of its reportable operating segments; and intersegment eliminations. Periodic net coupon settlements on non-qualifying derivatives and net realized capital gains and losses related to guaranteed minimum withdrawal benefits are reflected in each applicable segment in net realized capital gains and losses.

Property & Casualty is now organized into four reportable operating segments: the underwriting segments of Business Insurance, Personal Lines, and Specialty Commercial (collectively “Ongoing Operations”); and the Other Operations segment. Prior to the segment reporting change made in the first quarter of 2004, Property and Casualty had also included a Reinsurance segment. With the discontinuance of writing new reinsurance assumed business, the reinsurance assumed business is now included in the Other Operations segment.

24

Segment Results

The following is a summary of net income for each of the Company’s Life segments and aggregate net income for the Company’s Property & Casualty operations.

Net Income (Loss)

	First Quarter Ended
	March 31,
	2004			2003			Change
Life
Retail Products Group	$	107		$	77			39	%
Institutional Solutions Group		28			31			(10	%)
Individual Life		33			32			3	%
Group Benefits		47			34			38	%
Other		66			(29	)	NM
Total Life		281			145			94	%
Total Property & Casualty		341			(1,495	)	NM
Corporate		(54	)		(45	)		(20	%)
Total net income (loss)	$	568		$	(1,395	)	NM

The following is a summary of Property & Casualty underwriting results by segment.

Underwriting Results (before-tax)

	First Quarter Ended
	March 31,
	2004			2003
Business Insurance	$	225		$	7
Personal Lines		106			56
Specialty Commercial		(110	)		5
Other Operations [1]		(65	)		(2,651	)

[1] Includes $2,604 in 2003 of before-tax impact of asbestos reserve addition.

LIFE

Operating Summary

	First Quarter Ended
	March 31,
	2004			2003			Change
Earned premiums	$	995		$	683			46	%
Fee income		786			617			27	%
Net investment income [1]		1,201			503			139	%
Other revenues		—			27			(100	%)
Net realized capital gains (losses)		76			(44	)	NM
Total revenues		3,058			1,786			71	%
Benefits, claims and claim adjustment expenses [1]		1,877			1,083			73	%
Amortization of deferred policy acquisition costs and present value of future profits		233			163			43	%
Insurance operating costs and expenses		526			351			50	%
Other expenses		1			4			(75	%)
Total benefits, claims and expenses		2,637			1,601			65	%
Income before income taxes and cumulative effect of accounting change		421			185			128	%
Income tax expense		117			40			193	%
Income before cumulative effect of accounting change		304			145			110	%
Cumulative effect of accounting change, net of tax [2]		(23	)		—		NM
Net income	$	281		$	145			94	%

[1]	With the adoption of SOP 03-1, certain annuity products were required to be accounted for in the general account. This change in accounting resulted in an increase in net investment income and benefits, claims and claim adjustment expenses.
[2]	For the quarter ended March 31, 2004, represents the cumulative impact of the Company’s adoption of SOP 03-1.

Life’s net income increased, largely due to a significant increase in realized capital gains. (See the Investments section for further discussion of investment results and related realized capital gains.) Also contributing to the earnings growth were increases in net income in the Retail and Group Benefits segments. Net income in the Retail segment increased, principally driven by growth in the variable annuity and mutual fund businesses as a result of increasing assets under management. Partially offsetting these increases was lower spread income on market value adjusted (“MVA”) fixed annuities due to the adoption of the SOP. Net income in the Group Benefits segment increased due to earned premiums and net investment income growth, primarily resulting from the Company’s acquisition of the group life and accident, and short-term and long-term disability businesses of CNA Financial Corporation (“CNA Acquisition”).

25

Partially offsetting the positive earnings drivers discussed above was the cumulative effect of accounting change from the Company’s adoption of the SOP. The adoption of the SOP also resulted in certain changes in presentation in the Company’s financial statements, including reporting of the spreads on the Company’s MVA fixed annuities and variable annuity products offered in Japan on a gross basis in net investment income and benefits expense. Exclusive of the cumulative effect, overall application of the SOP resulted in an immaterial reduction in net income. (For further discussion of the impact of the Company’s adoption of the SOP see Note 1 of Notes to Condensed Consolidated Financial Statements).

Retail Products Group

Operating Summary

	First Quarter Ended
	March 31,
	2004			2003			Change
Fee income and other	$	506		$	364			39	%
Earned premiums		(14	)		(9	)		(56	%)
Net investment income		272			117			132	%
Net realized capital (losses) gains		(1	)		6		NM
Total revenues		763			478			60	%
Benefits, claims and claim adjustment expenses		257			147			75	%
Insurance operating costs and other expenses		175			132			33	%
Amortization of deferred policy acquisition costs and present value of future profits		167			103			62	%
Total benefits, claims and expenses		599			382			57	%
Income before income taxes and cumulative effect of accounting change		164			96			71	%
Income tax expense		38			19			100	%
Income before cumulative effect of accounting change		126			77			64	%
Cumulative effect of accounting change, net of tax[1]		(19	)		—		NM
Net income	$	107		$	77			39	%

	March 31,		March 31,
	2004		2003		Change
Individual variable annuity account values	$	90,386	$	64,047		41	%
Other individual annuity account values		11,312		10,602		7	%
401K and Specialty products account values		5,230		3,219		62	%
Total account values [2]		106,928		77,868		37	%
Mutual fund assets under management		22,977		14,328		60	%
Total assets under management	$	129,905	$	92,196		41	%
S&P 500 Index value at end of period		1,126		848		33	%

[1] For the quarter ended March 31, 2004, represents the cumulative impact of the Company’s adoption of SOP 03-1.

[2] Includes policyholder balances for investment contracts and reserves for future policy benefits for insurance contracts.

Net income in the Retail segment increased, principally driven by significant growth in the assets under management within the variable annuity and mutual fund businesses. Assets under management is an internal performance measure used by the segment as relative profitability is highly correlated to the growth in assets under management which is driven by net flows and performance of the equity markets. Fee income generated by the variable annuity operation increased, as average account values increased in the first quarter as compared to the prior year. The increase in average account values can be attributed to approximately $8.6 billion of net flows over the past four quarters and growth in the equity markets, more specifically the average daily value of the S&P 500, which rose by approximately 31% in this time period. The Company uses the S&P 500 Index as an indicator for evaluating market returns of the underlying account portfolios. Another contributing factor to the increase in fee income was the mutual fund business. Mutual fund assets under management increased due to equity market growth as well as higher net sales, which were $1.1 billion in the first quarter as compared to $132 in the first quarter of 2003.

Partially offsetting the positive earnings drivers discussed above were the cumulative effect of accounting change from the Company’s adoption of the SOP and the resulting lower net income associated with the individual fixed annuity business. The decrease in net income in the individual fixed annuity business was attributed to a lower investment spread from the market value adjusted fixed annuity product in the first quarter of 2004 as compared to prior year. With the adoption of the SOP, the Company includes the investment return from the product in net investment income and includes interest credited to contract holders in the benefits, claims and claim adjustment expenses line on the income statement rather than reporting the net spread in fee income. Additionally, the ratio of DAC amortization to gross profits for the individual annuity business (defined as amortization of deferred policy acquisition costs as a percentage of income before taxes and amortization of deferred policy acquisition costs) was slightly higher in the first quarter as compared to the prior year, which reduced net income.

26

Institutional Solutions Group

Operating Summary

	First Quarter Ended
	March 31,
	2004			2003		Change
Fee income and other	$	74		$	77		(4	%)
Earned premiums		109			100		9	%
Net investment income		257			244		5	%
Net realized capital gains		2			1		100	%
Total revenues		442			422		5	%
Benefits, claims and claim adjustment expenses		355			335		6	%
Insurance operating costs and other expenses		37			36		3	%
Amortization of deferred policy acquisition costs and present value of future profits		9			6		50	%
Total benefits, claims and expenses		401			377		6	%
Income before income taxes and cumulative effect of accounting change		41			45		(9	%)
Income tax expense		12			14		(14	%)
Income before cumulative effect of accounting change		29			31		(6	%)
Cumulative effect of accounting change, net of tax[1]		(1	)		—		NM
Net income	$	28		$	31		(10	%)

	March 31,		March 31,
	2004		2003		Change
Institutional account values	$	12,941	$	9,963		30	%
Governmental account values		9,243		7,199		28	%
Private Placement Life Insurance account values
Variable products		21,305		19,863		7	%
Leveraged COLI		2,537		3,159		(20	%)
Total account values [2]		46,026		40,184		15	%
Mutual fund assets under management		1,246		717		74	%
Total assets under management	$	47,272	$	40,901		16	%

[1] For the quarter ended March 31, 2004, represents the cumulative impact of the Company’s adoption of SOP 03-1.

[2] Includes policyholder balances for investment contracts and reserves for future policy benefits for insurance contracts.

Net income for the Institutional segment decreased as compared to the comparable prior year period. This decrease was the result of lower earnings from the private placement life insurance business and the institutional business, which includes structured settlements and institutional annuities. Lower net income in private placement life insurance was due primarily to lower revenues earned as a result of lower account values in the leveraged COLI product due primarily to surrenders that occurred in 2003. The leveraged COLI product continues to contribute favorably to the segment’s profitability, although the contribution may decline in the future depending on the surrender activity of these policies. In addition, the institutional business contributed lower earnings in the first quarter of 2004 compared to the same period in 2003. This decrease was primarily the result of favorable mortality experienced in 2003. Partially offsetting these declines was a small increase in the net income before the cumulative effect of accounting change of the Governmental business when compared to the same period in 2003. This increase was primarily attributable to higher revenues earned from the growth in the average account values as a result of positive net flows and market appreciation since the first quarter of 2003.

27

Individual Life

Operating Summary

	First Quarter Ended
	March 31,
	2004			2003			Change
Fee income and other	$	186		$	182			2	%
Earned premiums		(5	)		(4	)		(25	%)
Net investment income		73			66			11	%
Total revenues		254			244			4	%
Benefits, claims and claim adjustment expenses		125			112			12	%
Amortization of deferred policy acquisition costs and present value of future profits		39			46			(15	%)
Insurance operating costs and other expenses		40			39			3	%
Total benefits, claims and expenses		204			197			4	%
Income before income taxes and cumulative effect of accounting change		50			47			6	%
Income tax expense		16			15			7	%
Income before cumulative effect of accounting change		34			32			6	%
Cumulative effect of accounting change, net of tax[1]		(1	)		—		NM
Net income	$	33		$	32			3	%

	March 31,		March 31,
	2004		2003		Change
Variable universal life account values	$	4,797	$	3,673		31	%
Total account values	$	8,836	$	7,583		17	%
Variable universal life insurance in force	$	67,101	$	66,631		1	%
Total life insurance in force	$	132,482	$	127,029		4	%

[1] For the quarter ended March 31, 2004, represents the cumulative impact of the Company’s adoption of SOP 03-1.

Net income in the Individual Life segment increased slightly as compared to the comparable prior year period. This increase was primarily driven by growth in account values and life insurance in-force and favorable equity market conditions. The impact of this growth was partially offset by higher mortality costs than the prior year. However, the increased mortality costs reduced the amount of amortization of deferred policy acquisition costs recorded during the quarter. Net investment income increased partially due to the adoption of the SOP, which resulted in increases in net investment income and benefits, claims and claim adjustment expenses for the segment’s Modified Guarantee Life Insurance product, which was formerly classified as a separate account product.

Group Benefits

Operating Summary

	First Quarter Ended
	March 31,
	2004		2003			Change
Earned premiums and other	$	915	$	602			52	%
Net investment income		89		68			31	%
Net realized capital losses		—		(3	)		100	%
Total revenues		1,004		667			51	%
Benefits, claims and claim adjustment expenses		684		489			40	%
Amortization of deferred policy acquisition costs and present value of future profits		5		4			25	%
Insurance operating costs and other expenses		252		131			92	%
Total benefits, claims and expenses		941		624			51	%
Income before income taxes		63		43			47	%
Income tax expense		16		9			78	%
Net income	$	47	$	34			38	%
Fully insured – ongoing premiums	$	905	$	568			59	%
Buyout premiums		—		28			(100	%)
Other		10		6			83	%
Earned premiums and other	$	915	$	602			52	%

28

Net income in the Group Benefits segment increased due to earned premiums and net investment income growth, both in the former Group Benefits business as well as the result of the CNA Acquisition. The increase in earned premiums was driven by sales of $341, a 54% increase over sales reported in the comparable prior year period and favorable persistency. Although benefits, claims and claim adjustment expenses increased, the segment’s loss ratio (defined as benefits, claims and claim adjustment expenses as a percentage of premiums and other considerations excluding buyouts) was 75%, down from 80% in first quarter 2003, which contributed favorably to net income. Partially offsetting these favorable items were higher commissions due to higher sales and premiums previously discussed and sales from the CNA Acquisition. Additionally, operating costs increased due to the growth in the segment and the CNA Acquisition. Consistent with the increase in commissions and operating costs, the segment’s ratio of insurance operating costs and other expenses to premiums and other considerations (excluding buyouts) increased to 28%, from 23% in 2003. As part of the CNA Acquisition, a larger block of affinity business is now included in the Group Benefits segment in 2004. This business typically has lower expected loss ratios and higher expected commission ratios than other products within the business. Due to this change in business mix, the segment, as expected, has a lower loss ratio and higher commission ratio than in 2003.

PROPERTY & CASUALTY

Operating Summary

	First Quarter Ended
	March 31,
	2004			2003			Change
Earned premiums	$	2,186		$	2,166			1	%
Net investment income		311			281			11	%
Other revenues [1]		104			95			9	%
Net realized capital gains (losses)		71			(1	)	NM
Total revenues		2,672			2,541			5	%
Benefits, claims and claim adjustment expenses
Current year		1,469			1,504			(3	%)
Prior year		(51	)		2,657		NM
Total benefits, claims and claim adjustment expenses		1,418			4,161			(66	%)
Amortization of deferred policy acquisition costs		446			401			11	%
Insurance operating costs and expenses		166			187			(11	%)
Other expenses		163			133			23	%
Total benefits, claims and expenses		2,193			4,882			(55	%)
Income (loss) before income taxes		479			(2,341	)	NM
Income tax expense (benefit)		138			(846	)	NM
Net income (loss) [2]	$	341		$	(1,495	)	NM
Ongoing Operations Underwriting Ratios [3]
Loss and loss adjustment expense ratio
Current year		66.8			69.9			3.1
Prior year		(4.5	)		—			4.5
Total loss and loss adjustment expense ratio		62.2			69.9			7.7
Expense ratio		27.3			26.2			(1.1	)
Policyholder dividend ratio		0.3			0.5			0.2
Combined ratio		89.8			96.6			6.8
Catastrophe ratio		(12.2	)		2.7			14.9
Combined ratio before catastrophes		102.0			93.8			(8.2	)
Combined ratio before catastrophes and prior accident year development		92.7			93.8			1.1

[1]	Represents servicing revenue.
[2]	Includes net realized capital gains (losses), after-tax, of $47 and $0 for the quarters ended March 31, 2004 and 2003, respectively.
[3]	Excludes Other Operations.

Revenues for Property & Casualty increased $131 for the first quarter ended March 31, 2004 compared with the first quarter of 2003. The increase was due primarily to an increase in net realized capital gains (losses) and net investment income as well as earned premium growth. The increase in earned premiums in the Business Insurance and Personal Lines segments was due primarily to earned pricing increases and new business growth. Partially offsetting the growth in earned premiums was a decrease of $90 in Specialty Commercial earned premiums, reflecting a reduction in estimated earned premium under retrospectively-rated policies.

Net income increased $1.8 billion for the first quarter ended March 31, 2004, primarily due to the net asbestos reserve strengthening of $1.7 billion, after-tax, in the first quarter ended March 31, 2003. Results for the quarter also were favorably impacted by improved underwriting results and increases in net realized capital gains (losses) and net investment income. Pre-tax net investment income rose $30 for the quarter ending March 31, 2004, due to higher invested assets, primarily from strong cash flows.

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Ratios

The previous table and the following segment discussions for the quarters ended March 31, 2004 and 2003 include various operating ratios. Management believes that these ratios are useful in understanding the underlying trends in The Hartford’s insurance underwriting business. However, these measures should only be used in conjunction with, and not in lieu of, underwriting income and net income for the Property & Casualty segments and may not be comparable to other performance measures used by the Company’s competitors. The “loss and loss adjustment expense ratio” is the ratio of claims and claim adjustment expenses to earned premiums. The “expense ratio” is the ratio of underwriting expenses to earned premiums. The “policyholder dividend ratio” is the ratio of policyholder dividends to earned premiums. The “combined ratio” is the sum of the loss and loss adjustment expense ratio, the expense ratio and the policyholder dividend ratio. These ratios are relative measurements that describe for every $100 of net premiums earned, the cost of losses and expenses, respectively. A combined ratio below 100 demonstrates underwriting profit; a combined ratio above 100 demonstrates underwriting losses. The “loss and loss expense paid ratio” represents the ratio of paid claims and claim adjustment expenses to earned premiums. The “catastrophe ratio” represents the ratio of catastrophe losses to earned premiums. A catastrophe is an event that causes $25 or more in industry insured property losses and affects a significant number of property and casualty policyholders and insurers. See the Reserve section for explanation of prior accident year development.

Premium Measures

Written premiums are a non-GAAP financial measure which represent the amount of premiums charged for policies issued, net of reinsurance, during a fiscal period. Earned premiums are a GAAP measure. Premiums are considered earned and are included in the financial results on a pro rata basis over the policy period. The following segment discussions for the quarters ended March 31, 2004 and 2003 include the presentation of written premiums in addition to earned premiums. Management believes that this performance measure is useful to investors as it reflects current trends in the Company’s sales of property and casualty insurance products, as compared to earned premiums. Premium renewal retention is defined as renewal premium written in the current period divided by total premium written in the prior period.

Reserves

Reserving for property and casualty losses is an estimation process. As additional experience and other relevant claim data become available, reserve levels are adjusted accordingly. Such adjustments of reserves related to claims incurred in prior years are a natural occurrence in the loss reserving process and are referred to as “reserve development”. Reserve development that increases previous estimates of ultimate cost is called “reserve strengthening”. Reserve development that decreases previous estimates of ultimate cost is called “reserve releases”. Reserve development can influence the comparability of year over year underwriting results and is set forth in the paragraphs and tables that follow. The “prior accident year development” in the following table represents the ratio of reserve development to earned premiums. For a detailed discussion of the Company’s reserve policies, see Notes 1, 7 and 16 of Notes to Consolidated Financial Statements and the Critical Accounting Estimates section of the MD&A included in The Hartford’s 2003 Form 10-K Annual Report.

During the first quarter of 2004, the aggregate net reserve development relative to the Company’s Property & Casualty reserves was not material. The amount of reserve development in the first quarter for each of the Company’s Property & Casualty segments varied. During the first quarter of 2004, the Company completed a gross asbestos reserve evaluation. The evaluation indicated no change in the overall required gross asbestos reserves. It is anticipated that the related net reserve evaluation will be completed during the second quarter of 2004. The results of the gross study may not be an indication of what may result from the net study. Until the application of ceded reinsurance to the direct and assumed reserves and an assessment of collectibility are completed, the Company will not know the impact, if any, on the required net reserves.

As indicated in the Company’s segment level reserve discussion in the 2003 Annual Report on Form 10-K, at the end of 2003 several areas of reserve exposure were being closely monitored. Consistent with the Company’s practices to regularly review its reserves, the Company continued to monitor these reserve exposures throughout the first quarter and completed several reserve studies, including studies related to September 11 reserves and construction defects claims. As a result of these monitoring activities and studies, the Company made reserve adjustments with regard to certain of those reserve exposures, most notably related to September 11, construction defects and certain assumed reinsurance reserves. These reserve adjustments and the effects on the Company’s segments are more fully discussed in the paragraphs that follow.

With respect to September 11 claim reserves, the Company observed continued favorable developments, including the closure of all but 44 primary insurance property cases, no additional significant anticipated loss notices on assumed reinsurance property treaties, a high participation rate within the Victim’s Compensation Fund and the expiration of the deadline for filing a liability claim in March 2004. Based on these sustained favorable events, the Company determined in the first quarter that it was appropriate to reduce both the gross and net estimate of loss from September 11. The Company’s gross estimate of loss of $1.1 billion was reduced to $845. Gross reserves remaining are $430. The corresponding reduction in net reserves for September 11 was $175 in Business Insurance, $116 in Specialty Commercial, $7 in Personal Lines and $97 in Other Operations. Net reserves remaining are $152. Most of the remaining September 11 net reserves carried by the Company relate to incurred but not reported (“IBNR”) reserves for workers compensation exposures.

The Company has exposure to losses from construction defects, particularly from contractors in California. The Company has been evaluating and closely monitoring these reserves over time. Based on the Company’s first quarter study that used various predictive models and reflected the increasing severity of construction defect claims, the Company concluded an increase in reserves of $190 was required. This increase consisted of $23 for Business Insurance and $167 for Specialty Commercial.

As indicated in the Company’s year-end 2003 reserve discussion, assumed casualty reinsurance reserves have been difficult to

30

project. The Company has been evaluating and closely monitoring these reserves over time and during 2003 and 2002 booked unfavorable reserve development of $129 and $77, respectively. Unfavorable trends continued in the first quarter of 2004 and, as a result, the Company increased reserves by $130. The majority of the $130 is for assumed casualty treaty reinsurance for the years 1997-2001, with $30 for certain alternative risk transfer contracts.

In addition to the foregoing reserve adjustments in the first quarter of 2004, within the Specialty Commercial segment, there were other offsetting positive and negative adjustments. The principal offsetting adjustments related to a strengthening in specialty large deductible workers compensation reserves and a release in other liability reserves, each approximately $150.

A rollforward of liabilities for unpaid claims and claim adjustment expenses by segment for the first quarter ended March 31, 2004 for Property & Casualty follows:

	First Quarter Ended March 31, 2004
	Business Insurance			Personal Lines			Specialty Commercial			Ongoing Operations			Other Operations			Total P&C
Beginning liabilities for unpaid claims and claim adjustment expenses-gross	$	5,296		$	1,733		$	5,148		$	12,177		$	9,538		$	21,715
Reinsurance and other recoverables		395			43			2,096			2,534			2,963			5,497
Beginning liabilities for unpaid claims and claim adjustment expenses-net		4,901			1,690			3,052			9,643			6,575			16,218
Add provision for unpaid claims and claim adjustment expenses
Current year		626			533			293			1,452			17			1,469
Prior year [1]		(147	)		1			47			(99	)		48			(51	)
Total provision for unpaid claims and claim adjustment expenses		479			534			340			1,353			65			1,418
Less payments [2]		(447	)		(545	)		(258	)		(1,250	)		(1,176	)		(2,426	)
Ending liabilities for unpaid claims and claim adjustment expenses-net [1]		4,933			1,679			3,134			9,746			5,464			15,210
Reinsurance and other recoverables		369			42			1,932			2,343			2,693			5,036
Ending liabilities for unpaid claims and claim adjustment expenses-gross [1]	$	5,302		$	1,721		$	5,066		$	12,089		$	8,157		$	20,246
Earned premiums	$	1,018		$	835		$	321		$	2,174		$	12		$	2,186
Loss and loss expense paid ratio		43.9			65.4			80.5			57.6
Loss and loss expense incurred ratio		47.1			64.1			105.2			62.2
Prior accident year development (pts.)		(14.5	)		0.1			14.9			(4.5	)

[1]

The quarter ended March 31, 2004 included a net reserve release related to September 11 of $175 in Business Insurance, $7 in Personal Lines, $116 in Specialty Commercial and $97 in Other Operations, an increase of $190 for construction defects claims, an increase in assumed casualty reinsurance reserves of $130, and offsetting strengthening in large deductible workers compensation reserves and release in other liability reserves, each approximately $150.

[2]

Other Operations reflects payments pursuant to the MacArthur settlement.

Reinsurance Recoverables

The Company’s net reinsurance recoverables from various property and casualty reinsurance arrangements amounted to $5.2 billion and $5.4 billion at March 31, 2004 and December 31, 2003, respectively. Of the total net reinsurance recoverables as of December 31, 2003, $446 relates to the Company’s mandatory participation in various involuntary assigned risk pools, which are backed by the financial strength of the property and casualty insurance industry. Of the remainder, $3.5 billion, or 71%, were rated by A.M. Best. Of the total rated by A.M. Best, 92%, were rated A- (excellent) or better. The remaining $1.4 billion, or 29%, of net recoverables from reinsurers were comprised of the following: 5% related to voluntary pools, 2% related to captive insurance companies, and 22% related to companies not rated by A.M. Best. There have been no material changes to the distribution of net recoverables from reinsurers for the Company since December 31, 2003.

31

Where its contracts permit, the Company secures future claim obligations with various forms of collateral including irrevocable letters of credit, secured trusts such as New York Regulation 114 trusts, funds held accounts and group wide offsets.

The allowance for unrecoverable reinsurance was $348 and $381 at March 31, 2004 and December 31, 2003, respectively. The allowance for unrecoverable reinsurance is based on an assessment of the credit quality of our reinsurers as well as an estimate (if any) of the cost of resolution of reinsurer disputes.

In the second quarter, the Company expects to complete an updated study of the reinsurance recoverable asset associated with older, long-term casualty liabilities reported in the Other Operations segment, including asbestos liabilities. The Company has observed certain developments that could potentially have implications for its ability to recover reinsurance cessions of such liabilities, including recent trends in commutation activity between reinsurers and cedants and recent trends in arbitration and litigation outcomes in disputes between these parties. The Company is also analyzing recent changes in the mix of The Hartford’s estimated liabilities in the Other Operations segment to determine whether these have implications for its ability to cede liabilities.

Business Insurance

Underwriting Summary

	First Quarter Ended
	March 31,
	2004			2003		Change
Written premiums	$	1,136		$	990		15	%
Change in unearned premium reserve		118			110		7	%
Earned premiums	$	1,018		$	880		16	%
Benefits, claims and claim adjustment expenses
Current year		626			598		5	%
Prior year		(147	)		—		—
Total benefits, claims and claim adjustment expenses		479			598		(20	%)
Amortization of deferred policy acquisition costs		255			204		25	%
Insurance operating costs and expenses		59			71		(17	%)
Underwriting results	$	225		$	7		NM
Loss and loss adjustment expense ratio
Current year		61.6			67.9		6.3
Prior year		(14.5	)		—		14.5
Total loss and loss adjustment expense ratio		47.1			67.9		20.8
Expense ratio		30.3			30.5		0.2
Policyholder dividend ratio		0.4			0.8		0.4
Combined ratio		77.9			99.2		21.3
Catastrophe ratio		(15.4	)		4.6		20.0
Combined ratio before catastrophes		93.4			94.6		1.2
Combined ratio before catastrophes and prior accident year development		90.3			94.6		4.3

Premium Breakdown

	Written Premiums [1]							Earned Premiums [1]
	First Quarter Ended							First Quarter Ended
	March 31,							March 31,
	2004		2003		Change			2004		2003		Change
Small Commercial	$	560	$	480		17	%	$	481	$	430		12	%
Middle Market		576		510		13	%		537		450		19	%
Total	$	1,136	$	990		15	%	$	1,018	$	880		16	%

[1] The difference between written premiums and earned premiums is attributable to the change in unearned premium reserve.

Business Insurance achieved written premium growth of $146 reflecting new business growth of 11% and written pricing increases of 4%. Premium renewal retention was 84% and 90% for the first quarter ending March 31, 2004 and 2003, respectively. Small commercial and middle market written premiums increased $80 and $66, respectively, as a result of new business growth and written pricing increases. Premium renewal retention remains strong in both small commercial and middle market.

Earned premiums for the segment increased $138 due to strong 2003 and 2004 written pricing increases. Earned premiums increased $87 and $51 for middle market and small commercial, respectively, reflecting strong earned pricing increases.

Underwriting results improved $218, with a corresponding 21.3 point decrease in the combined ratio, for the first quarter ended March 31, 2004. The improvement was driven by a decrease in the loss and loss adjustment expense ratio due primarily to a reduction in reserves for September 11 of $175, which was partially offset by an increase in reserves of $23 for construction defects. These reserve actions represent 14.9 points of the 14.5 point favorable development in prior year losses. The catastrophe ratio includes 17.2 points of favorable development related to the $175 decrease in September 11 reserves. Before this favorable

32

impact, catastrophe losses in the first quarter of 2004 decreased by 2.8 points from the same period in the prior year. Before catastrophes and all prior accident year development, underwriting results improved $52 with a corresponding 4.3 point decrease in the combined ratio. The improvement was driven by a decrease in the loss and loss adjustment expense ratio for both small commercial and middle market, primarily due to improved frequency of loss and earned pricing increases.

Personal Lines

Underwriting Summary

	First Quarter Ended
	March 31,
	2004		2003			Change
Written premiums	$	836	$	770			9	%
Change in unearned premium reserve		1		(2	)		NM
Earned premiums	$	835	$	772			8	%
Benefits, claims and claim adjustment expenses
Current year		533		540			(1	%)
Prior year		1		—			—
Total benefits, claims and claim adjustment expenses		534		540			(1	%)
Amortization of deferred policy acquisition costs		125		104			20	%
Insurance operating costs and expenses		70		72			(3	%)
Underwriting results	$	106	$	56			89	%
Loss and loss adjustment expense ratio
Current year		64.0		69.7			5.7
Prior year		0.1		—			(0.1	)
Total loss and loss adjustment expense ratio		64.1		69.7			5.6
Expense ratio		23.3		23.0			(0.3	)
Combined ratio		87.4		92.7			5.3
Catastrophe ratio		0.8		1.4			0.6
Combined ratio before catastrophes		86.6		91.3			4.7
Combined ratio before catastrophes and prior accident year development		86.1		91.3			5.2
Other revenues [1]	$	29	$	28			4	%

[1] Represents servicing revenue.

Premium Breakdown

	Written Premiums [1]							Earned Premiums [1]
	First Quarter Ended							First Quarter Ended
	March 31,							March 31,
	2004		2003		Change			2004		2003		Change
Business Unit
AARP	$	523	$	475		10	%	$	520	$	466		12	%
Other Affinity		34		42		(19	%)		36		44		(18	%)
Agency		210		186		13	%		215		199		8	%
Omni		69		67		3	%		64		63		2	%
Total	$	836	$	770		9	%	$	835	$	772		8	%
Product Line
Automobile	$	649	$	609		7	%	$	633	$	598		6	%
Homeowners		187		161		16	%		202		174		16	%
Total	$	836	$	770		9	%	$	835	$	772		8	%
Combined Ratios
Automobile									90.1		96.1		6.0
Homeowners									78.7		80.8		2.1
Total									87.4		92.7		5.3

[1] The difference between written premiums and earned premiums is attributable to the change in unearned premium reserve.

Written premiums increased $66 due to growth in both the automobile and homeowners lines. The increase in automobile of $40 was due to strong new business growth and written pricing increases of 4%. Automobile premium renewal retention was 88% and 90% for the first quarter ending March 31, 2004 and 2003, respectively. Homeowners growth of $26 was also largely driven by increased new business and written pricing increases of 10%. Homeowners premium renewal retention was 101% and 103% for the first quarter ending March 31, 2004 and 2003, respectively. The increases in both automobile and homeowners written premiums were primarily due to growth in the AARP program and the agency business unit. AARP increased $48 and agency increased $24, primarily as a result of strong new business growth and written pricing increases. Although written premium growth in agency increased 13%, this increase reflects the dampening effects of the Company’s conversion from twelve to six-month policies written under a new automobile class plan product. Partially offsetting the

33

increase in written premiums for the Personal Lines segment was a $8 decrease in written premiums in other affinity due to an expected reduction in policy counts. Earned premiums increased $63 due primarily to growth in AARP. AARP increased $54 primarily as a result of earned pricing increases.

Underwriting results increased $50, with a corresponding 5.3 point decrease in the combined ratio. Automobile results improved 6.0 combined ratio points due to earned pricing increases. The underwriting experience related to homeowners continued to remain favorable and improved 2.1 combined ratio points over the prior year period due primarily to double-digit earned pricing increases and favorable loss frequency.

Specialty Commercial

Underwriting Summary

	First Quarter Ended
	March 31,
	2004			2003		Change
Written premiums	$	426		$	406		5	%
Change in unearned premium reserve		105			51		106	%
Earned premiums	$	321		$	355		(10	%)
Benefits, claims and claim adjustment expenses
Current year		293			265		11	%
Prior year		47			—		—
Total benefits, claims and claim adjustment expenses		340			265		28	%
Amortization of deferred policy acquisition costs		61			56		9	%
Insurance operating costs and expenses		30			29		3	%
Underwriting results	$	(110	)	$	5	NM
Loss and loss adjustment expense ratio
Current year		90.3			75.1		(15.2	)
Prior year		14.9			—		(14.9	)
Total loss and loss adjustment expense ratio		105.2			75.1		(30.1	)
Expense ratio		28.1			22.6		(5.5	)
Policyholder dividend ratio		0.8			0.7		(0.1	)
Combined ratio		134.1			98.4		(35.7	)
Catastrophe ratio		(35.6	)		0.9		36.5
Combined ratio before catastrophes		169.7			97.5		(72.2	)
Combined ratio before catastrophes and prior accident year development		117.5			97.5		(20.0	)
Other revenues [1]	$	74		$	67		10	%

[1] Represents servicing revenue.

Premium Breakdown

	Written Premiums [1]							Earned Premiums [1]
	First Quarter Ended							First Quarter Ended
	March 31,							March 31,
	2004		2003		Change			2004		2003		Change
Property		83		97		(14	%)		87		89		(2	%)
Casualty		192		187		3	%		81		148		(45	%)
Bond		48		45		7	%		44		42		5	%
Professional Liability		78		65		20	%		82		64		28	%
Other		25		12		108	%		27		12		125	%
Total	$	426	$	406		5	%	$	321	$	355		(10	%)

[1] The difference between written premiums and earned premiums is attributable to the change in unearned premium reserve.

Specialty Commercial written premiums increased $20, driven by an increase in professional liability, partially offset by a reduction in premium renewal retention in property. The increase in written premiums for professional liability is primarily due to a decrease in the portion of risks ceded to reinsurers, offset in part by a decrease in written pricing and a decrease in premium renewal retention. Casualty experienced written pricing increases of 11 to 15%, offset by a decrease in renewal retention. Within the “other” category, written premiums increased due to increased premiums on internal reinsurance arrangements.

Premiums receivable under retrospectively-rated policies were reduced by $90, reflecting a decrease in estimated earned premiums under the terms of these policies. This reduction in retrospective premiums receivable, which is based on the Company’s most recent estimates, was reflected as a reduction in earned premiums in the first quarter of 2004, which is the main cause of the $34 decrease in earned premiums. Partially offsetting the decrease in earned premiums was growth in the casualty and professional liability lines of business as a result of strong earned pricing increases.

Underwriting results decreased $115 for the first quarter as compared with the same prior year period, due primarily to the $90 decrease in earned premiums under retrospectively-rated policies and net unfavorable prior accident year loss development. Prior accident year loss development of $47 for the first quarter included $167 of reserve strengthening for

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construction defect claims, a release of $116 in September 11 reserves, and strengthening in large deductible workers compensation reserves and a release in other liability reserves, each approximately $150. The combined effect of all prior accident year loss development and earned premium adjustment on retrospectively-rated policies caused a 34.7 point increase in the total loss and loss expense ratio, and a 41.1 point increase in the combined ratio. Before considering the $116 release in September 11 reserves, the catastrophe ratio was 0.6 points, which is down slightly from the prior year period.

Before catastrophes, all prior year accident development, and the earned premium adjustment on retrospectively-rated policies, underwriting results improved $24 with a corresponding 5.8 point decrease in the combined ratio primarily due to underwriting improvement over the prior year period in the casualty and professional liability lines of business.

Other Operations (Including Asbestos and Environmental Claims)

	First Quarter Ended
	March 31,
Operating Summary	2004			2003			Change
Written premiums	$	(1	)	$	281		NM
Change in unearned premium reserve		(13	)		122		NM
Earned premiums		12			159			(92	%)
Benefits, claims and claim adjustment expenses
Current year		17			101			(83	%)
Prior year		48			2,657			(98	%)
Total benefits, claims and claim adjustment expenses		65			2,758			(98	%)
Amortization of deferred policy acquisition costs		5			37			(95	%)
Insurance operating costs and expenses		7			15			(33	%)
Underwriting results	$	(65	)	$	(2,651	)		98	%

The Other Operations segment includes operations that are under a single management structure, Heritage Holdings, which is responsible for two related activities. The first activity is the management of certain subsidiaries and operations of The Hartford that have discontinued writing new business. The second is the management of claims (and the associated reserves) related to asbestos and environmental exposures. Effective January 1, 2004, the financial results of the Company’s Reinsurance segment are reported in Other Operations and 2003 results of operations have been reclassified to reflect this change.

The decline in written and earned premiums in the first quarter was due to the Company’s decision to exit the assumed domestic reinsurance business in May 2003. The Company entered into a quota share and purchase agreement with Endurance Reinsurance Corporation of America (“Endurance”), whereby the majority of the Company’s inforce book of business was retroceded as of April 1, 2003 to Endurance. Under the quota share agreement, Endurance reinsured most of the assumed reinsurance contracts that were written by the Company on or after January 1, 2002 and that had unearned premium as of April 1, 2003. The Company remains subject to ongoing reserve development relating to all retained business.

The underwriting loss in 2003 reflects $2.6 billion of asbestos reserve strengthening. As indicated in the Company’s first quarter of 2004 reserves discussion, for Other Operations, September 11 net reserves were reduced by $97 and assumed reinsurance reserves, primarily for casualty business written during the 1997 – 2001 period and certain alternative risk transfer contracts, were increased by $130.

On December 19, 2003, Hartford Accident and Indemnity Co. (“Hartford A&I”) entered into a settlement agreement with MacArthur Co. and its subsidiary, Western MacArthur Co. Under the settlement agreement, during the first quarter of 2004, Hartford A&I paid $1.15 billion into an escrow account owned by Hartford A&I. The funds were held in an escrow account until conditions precedent to the settlement occurred in April. On April 22, 2004, the funds were disbursed from the escrow account into a trust established for the benefit of present and future asbestos claimants pursuant to the bankruptcy plan. The settlement payments have been accounted for as a reduction in unpaid claim and claim adjustment expenses during the first quarter of 2004. Because the escrow funds would have reverted back to The Hartford’s ownership if the conditions precedent had not occurred, the $1.15 billion payment also resulted in an increase in both other assets and other liabilities as of March 31, 2004. These will decrease in an equal amount when the escrowed funds are paid into the trust.

Asbestos and Environmental Claims

With regard to both environmental and particularly asbestos claims, significant uncertainty limits the ability of insurers and reinsurers to estimate the ultimate reserves necessary for unpaid losses and related expenses. Traditional actuarial reserving techniques cannot reasonably estimate the ultimate cost of these claims, particularly during periods when theories of law are in flux. The degree of variability of reserve estimates for these exposures is significantly greater than for other more traditional exposures. In particular, The Company believes there is a high degree of uncertainty inherent in the estimation of asbestos loss reserves.

In the case of the reserves for asbestos exposures, factors contributing to the high degree of uncertainty include inadequate development patterns, plaintiffs’ expanding theories of liability, the risks inherent in major litigation, and inconsistent emerging legal doctrines. Furthermore, insurers in general, including the Company, have recently experienced an increase in the number of asbestos-related claims due to, among other things, plaintiffs’

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increased focus on new and previously peripheral defendants, and an increase in the number of insureds seeking bankruptcy protection as a result of asbestos-related liabilities. Plaintiffs and insureds have sought to use bankruptcy proceedings, including “pre-packaged” bankruptcies, to accelerate and increase loss payments by insurers. In addition, some policyholders have asserted new classes of claims for so-called “non-products” coverages to which an aggregate limit of liability may not apply. Recently, many insurers, including The Hartford, also have been sued directly by asbestos claimants asserting that insurers had a duty to protect the public from the dangers of asbestos. Management believes these issues are not likely to be resolved in the near future.

Further uncertainties include whether some policyholders’ liabilities will reach the umbrella or excess layers of their coverage; the resolution or adjudication of some disputes pertaining to the amount of available coverage for asbestos claims in a manner inconsistent with The Hartford’s previous assessment of these claims; insolvencies of other carriers; the number and outcome of direct actions against The Hartford; and unanticipated developments pertaining to The Hartford’s ability to recover reinsurance for asbestos and environmental claims. It is also not possible to predict changes in the legal and legislative environment and their impact on the future development of asbestos and environmental claims. It is unknown whether potential Federal asbestos-related legislation will be enacted and, if so, what its effect will be on The Hartford’s aggregate asbestos liabilities.

The reporting pattern for excess insurance and reinsurance claims is much longer than for direct claims. In many instances, it takes months or years to determine that the policyholder’s own obligations have been met and how the reinsurance in question may apply to such claims. The delay in reporting excess and reinsurance claims adds to the uncertainty of estimating the related reserves.

In the case of the reserves for environmental exposures, factors contributing to the high degree of uncertainty include court decisions that have interpreted the insurance coverage to be broader than originally intended; inconsistent decisions, especially across jurisdictions; and uncertainty as to the monetary amount being sought by the claimant from the insured.

Given the factors and emerging trends described above, The Hartford believes the actuarial tools and other techniques it employs to estimate the ultimate cost of claims for other kinds of insurance exposure are less precise in estimating reserves for its asbestos and environmental exposures. For this reason, the Company relies on an exposure based analysis to estimate the ultimate costs of these claims and regularly evaluates new information in assessing its potential asbestos and environmental exposures.

Reserve Activity

Reserves and reserve activity in the Other Operations segment are categorized and reported as asbestos, environmental or “all other” activity. The following discussion below relates to reserves and reserve activity, net of applicable reinsurance.

There are a wide variety of claims that drive the reserves within each category of Other Operations. Asbestos claims relate primarily to bodily injuries asserted by those who came in contact with asbestos or products containing asbestos. Environmental claims relate primarily to pollution and related clean-up costs. The “all other” category of reserves covers a wide range of insurance and reinsurance coverages, including potential liability for breast implants, blood products, construction defects, lead paint and other long-tail liabilities.

The Other Operations book of business contains policies written from the 1940’s to 2003. The Hartford’s experience has been that this book of business has over time produced significantly higher claims and losses than were contemplated at inception. The areas of active claim activity have also shifted based on changes in plaintiff focus and the overall litigation environment. A significant portion of the claim reserves of the Other Operations segment relates to exposure to the insurance businesses of other insurers or reinsurers (“whole account” exposure). Many of these whole account exposures arise from reinsurance agreements previously written by The Hartford. The Hartford’s net exposure in these arrangements has increased for a variety of reasons, including The Hartford’s commutation of previous retrocessions of such business. Due to the reporting practices of cedants to their reinsurers, determination of the nature of the individual risks involved in these whole account exposures (such as asbestos, environmental, or other exposures) requires various assumptions and estimates, which are subject to uncertainty, as previously discussed.

Consistent with the Company’s long-standing reserving practices, The Hartford will continue to review and monitor these reserves regularly and, where future developments indicate, make appropriate adjustments to the reserves. The loss reserving assumptions, drawn from both industry data and the Company’s experience, have over time been applied to all of this business and have resulted in strengthening or reserve releases at various times over the past decade.

The following table presents reserve activity, inclusive of estimates for both reported and incurred but not reported claims, net of reinsurance, for Other Operations, categorized by asbestos, environmental and “all other” claims, for the quarter ended March 31, 2004. Also included are the remaining asbestos and environmental exposures of Ongoing Operations.

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Other Operations Claims and Claim Adjustment Expenses

For the First Quarter Ended March 31, 2004	Asbestos			Environmental		All Other [1]		Total
Beginning liability - net [2][3]	$	3,794		$	408	$	2,392	$	6,594
Claims and claim adjustment expenses incurred		3			3		61		67
Claims and claim adjustment expenses paid [5]		1,091			19		67		1,177
Ending liability – net [2] [3]	$	2,706	[4]	$	392	$	2,386	$	5,484

[1]	Includes unallocated loss adjustment expense reserves and the Reinsurance segment.
[2]	Ending liabilities include asbestos and environmental reserves reported in Ongoing Operations of $11 and $9, respectively, as of March 31, 2004 and of $11 and $8, respectively, as of December 31, 2003. The total net claim and claim adjustment expenses incurred of $67 includes $2 related to asbestos and environmental claims reported in Ongoing Operations.
[3]	Gross of reinsurance, asbestos and environmental reserves were $4,644 and $513, respectively, as of March 31, 2004 and $5,884 and $542, respectively, as of December 31, 2003.
[4]	The one year and average three year net paid amounts for asbestos claims are $1,215 and $1,443, respectively, resulting in a one year net survival ratio of 2.2 (13.7 excluding the MacArthur payments) and a three year net survival ratio of 5.6 (19.1 excluding MacArthur). Net survival ratio is the quotient of the net carried reserves divided by the average annual payment amount and is an indication of the number of years that the net carried reserve would last (i.e. survive) if the future annual claim payments were consistent with the calculated historical average.
[5]	Asbestos payments include $1.15 billion of payments pursuant to the MacArthur settlement.

At March 31, 2004, asbestos reserves were $2.7 billion, a decrease of $1.1 billion compared to $3.8 billion as of December 31, 2003. The decrease in asbestos reserves is primarily driven by the MacArthur settlement payment made in the first quarter of 2004. During the first quarter of 2004, the Company completed a gross asbestos reserve evaluation. As part of this evaluation, the Company reviewed all of its open direct domestic insurance accounts exposed to asbestos liability as well as assumed reinsurance accounts and certain closed accounts. The Company also examined its London Market exposures for both direct insurance and assumed reinsurance. The evaluation indicated no change in the overall required gross asbestos reserves. It is anticipated that the net reserve evaluation will be completed during the second quarter of 2004 and net reserve estimates could change as a result of this evaluation.

The Company classifies its asbestos reserves into three categories: direct insurance; assumed reinsurance and London Market. Direct insurance includes primary and excess coverage. Assumed Reinsurance includes both “treaty” reinsurance (covering broad categories of claims or blocks of business) and “facultative” reinsurance (covering specific risks or individual policies of primary or excess insurance companies). London Market business includes the business written by one or more of The Hartford’s subsidiaries in the United Kingdom, which are no longer active in the insurance or reinsurance business. Such business includes both direct insurance and assumed reinsurance.

The Company continues to divide its direct asbestos exposures into the following categories: Major Asbestos Defendants (the “Top 70” accounts in Tillinghast’s published Tiers 1 and 2 and Wellington accounts collectively divided into: structured settlements, Wellington, and Other Major Asbestos Defendants), Accounts with Future Expected Exposures greater than $2.5, Accounts with Future Expected Exposures less than $2.5 and Unallocated. An account may move between categories from one evaluation to the next. For example, an account with future expected exposure of greater than $2.5 in one evaluation may be reevaluated due to changing conditions in the account’s profile within the claim and legal environment such that the exposure may be viewed as less than $2.5 in a subsequent evaluation, or vice versa. During the first quarter of 2004, the Company reclassified some losses paid more than three years ago to different categories. These reclassifications had no effect on total reserves or on the one-year or three-year gross survival ratios.

Structured settlements are those accounts where the Company has reached an agreement with the insured as to the amount and timing of the claim payments to be made to the insured.

The Wellington category includes insureds that entered into the “Wellington Agreement” dated June 19, 1985. The Wellington Agreement provided terms and conditions for how the signatory asbestos producers would access their coverage from the signatory insurers.

The Other Major Asbestos Defendants subcategory represents insureds included in Tiers 1 and 2, as defined by Tillinghast. The Tier 1 and 2 classifications are meant to capture the insureds for which there is expected to be significant exposure to asbestos claims.

The unallocated category includes an estimate of the reserves necessary for asbestos claims related to direct insureds who have not previously tendered asbestos claims to the company, potential non-products exposures and closed accounts exclusive of Major Asbestos Defendants.

Assumed Reinsurance exposures are inherently less predictable than direct insurance exposures because the Company may not receive notice of a reinsurance claim until the underlying direct insurance claim is mature. This causes a delay in the receipt of information at the reinsurer level reflecting changes in the asbestos tort litigation and direct insurance coverage environments.

Estimating liabilities for London Market business is the most uncertain of the three categories of claims, (direct, assumed reinsurance and London Market.) As a participant in the London Market (comprised of both Lloyd’s of London and London Company Markets), the Company wrote business on a subscription basis, with the Company’s involvement being limited to a relatively small percentage of a total contract placement. Claims are reported, via a broker, to the “lead” underwriter and, once agreed to, are presented to the following markets for concurrence. This reporting and claim agreement process makes estimating liabilities for this business the most uncertain of the three categories of claims.

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The following table displays gross asbestos reserves and other statistics by policyholder category, as of March 31, 2004, reflecting the Company’s most recent gross reserve study:

Summary of Gross Asbestos Reserves

															3 Year
															Gross Survival
													3 Year		Ratio [1] [2]
								% of					Gross Survival		before
	Number of		All Time		Total			Asbestos			All Time		Ratio [1] [2]		MacArthur
	Accounts [5]		Paid		Reserves			Reserves			Ultimate		(in years)		(in years)
As of Most Recent Reserve Evaluation [4]
Major asbestos defendants
Structured settlements (includes 2 Wellington accounts)		7	$	257	$	358			6	%	$	615		9.1		9.1
Wellington (direct only)		31		682		281			5	%		963		5.3		5.3
Other major asbestos defendants		27		178		443			8	%		621		27.3		27.3
No known policies (includes 3 Wellington accounts)		5		—		—			—			—		—		—
Accounts with future exposure > $2.5		106		369		1,210			20	%		1,579		16.7		16.7
Accounts with future exposure < $2.5		930		152		135			2	%		287		12.9		12.9
MacArthur settlement		1		32		1,150			20	%		1,182
Unallocated [3]		—		100		896			15	%		996
Total direct				1,770		4,473			76	%		6,243		22.0		16.8
Assumed reinsurance				560		931			16	%		1,491		15.5		15.5
London market				373		480			8	%		853		13.6		13.6
Total				2,703		5,884			100	%		8,587		19.7		16.1
First Quarter 2004 MacArthur payments		1		1,162		(1,162	)					—
First Quarter 2004 Activity, excluding MacArthur				82		(78	)					4
Total as of March 31, 2004 [2]			$	3,947	$	4,644					$	8,591		6.6		14.8

[1]	Survival ratio is a commonly used industry ratio for comparing reserve levels between companies. While the method is commonly used, it is not a predictive technique. Survival ratios may vary over time due to numerous factors such as large payments due to the final resolution of certain asbestos liabilities, or reserve re-estimates. The survival ratio presented in the above table is computed by dividing the recorded reserves by the average of the past three years of payments. The ratio is the calculated number of years the recorded reserves would survive if future annual payments were equal to the average annual payments for the past three years. The 3-year gross survival ratio as of March 31, 2004 is computed based on total paid losses of $2,105 for the period from April 1, 2001 to March 31, 2004. All other 3-year gross survival ratios presented are based on total paid losses for the 3-year period ended December 31, 2003.
[2]	As of March 31, 2004, the one year gross paid amount for total asbestos claims is $1.5 billion resulting in a one year gross survival ratio of 3.1. If the ratio was calculated without considering the $1.16 billon in payments for MacArthur in the first quarter of 2004, the one year gross survival ratio would be 13.7.
[3]	Includes closed accounts, exclusive of Major Asbestos Defendants, and unallocated IBNR.
[4]	The information presented by account category reflects the first quarter 2004 reserve evaluation of gross asbestos losses incurred as of December 31, 2003.
[5]	An account may move between categories from one evaluation to the next. Reclassifications were made as a result of the reserve evaluation completed in the first quarter of 2004. There was no impact on total all-time paid losses or total reserves.

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The following table sets forth, for the quarter ended March 31, 2004, paid and incurred loss activity by the three categories of claims for asbestos and environmental.

Paid and Incurred Loss and Loss Adjustment Expense (“LAE”) Development – Asbestos and Environmental

	Asbestos						Environmental
	Paid			Incurred			Paid			Incurred
For the First Quarter Ended March 31, 2004	Loss & LAE [1]			Loss & LAE			Loss & LAE			Loss & LAE
Gross
Direct	$	1,233		$	4		$	20		$	3
Assumed – Domestic		7			—			3			—
London Market		4			—			9			—
Total		1,244			4			32			3
Ceded		(153	)		(1	)		(13	)		—
Net	$	1,091		$	3		$	19		$	3

[1] Reflects payments pursuant to the MacArthur settlement.

INVESTMENTS

General

The Hartford’s investment portfolios are primarily divided between Life and Property & Casualty. The investment portfolios are managed based on the underlying characteristics and nature of each operation’s respective liabilities and within established risk parameters. (For further discussion of The Hartford’s approach to managing risks, see the Investment Credit Risk section.)

The investment portfolios of Life and Property & Casualty are managed by Hartford Investment Management Company and its affiliates (“Hartford Investment Management”), a wholly-owned subsidiary of The Hartford. Hartford Investment Management is responsible for monitoring and managing the asset/liability profile, establishing investment objectives and guidelines, and determining, within specified risk tolerances and investment guidelines, the appropriate asset allocation, duration, convexity and other characteristics of the portfolios. Security selection and monitoring are performed by asset class specialists working within dedicated portfolio management teams.

As discussed in Note 1 of Notes to Condensed Consolidated Financial Statements, on January 1, 2004, the Company reclassified $17.9 billion of separate account assets to the general account as a result of adopting the SOP. Of this amount, $11.7 billion was associated with guaranteed separate accounts and was primarily comprised of fixed maturities. These assets are designated as available-for-sale securities with changes in fair value reported in other comprehensive income. The remaining $6.2 billion is primarily comprised of equity securities related to variable annuity products offered in Japan. These assets are designated as trading securities with changes in fair value reported in net investment income.

Return on invested assets is an important element of The Hartford’s financial results. Significant fluctuations in the fixed income or equity markets could weaken the Company’s financial condition or its results of operations. Additionally, changes in market interest rates may impact the period of time over which certain investments, such as mortgage-backed securities, are repaid and whether certain investments are called by the issuers. Such changes may, in turn, impact the yield on these investments and also may result in reinvestment of funds received from calls and prepayments at rates below the average portfolio yield. Net investment income and net realized capital gains and losses accounted for approximately 29% and 17% of the Company’s consolidated revenues for the quarters ended March 31, 2004 and 2003, respectively. The increase in the percentage of consolidated revenues is primarily due to income earned on separate account assets reclassified to the general account as a result of the adoption of the SOP.

Fluctuations in interest rates affect the Company’s return on, and the fair value of, fixed maturity investments, which comprised approximately 85% and 93% of the fair value of its invested assets as of March 31, 2004 and December 31, 2003, respectively. Other events beyond the Company’s control could also adversely impact the fair value of these investments. Specifically, a downgrade of an issuer’s credit rating or default of payment by an issuer could reduce the Company’s investment return.

The Company invests in private placement securities, mortgage loans and limited partnership arrangements in order to further diversify its investment portfolio. These investment types comprised approximately 16% and 17% of the fair value of its invested assets as of March 31, 2004 and December 31, 2003, respectively. These security types are typically less liquid than direct investments in publicly traded fixed income or equity investments. However, generally these securities have higher yields to compensate for the liquidity risk.

A decrease in the fair value of any investment that is deemed other-than-temporary would result in the Company’s recognition of a net realized capital loss in its financial results prior to the actual sale of the investment. (For further discussion, see the Company’s discussion of the evaluation of other-than-temporary impairments in Critical Accounting Estimates under the “Investments” section in the Hartford’s 2003 Form 10-K Annual Report.)

Life

The primary investment objective of Life is to maximize after-tax returns consistent with acceptable risk parameters, including the management of the interest rate sensitivity of invested assets and the generation of sufficient liquidity relative to that of policyholder and corporate obligations.

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The following table identifies Life’s invested assets by type as of March 31, 2004 and December 31, 2003.

Composition of Invested Assets

	March 31, 2004					December 31, 2003
	Amount		Percent			Amount		Percent
Fixed maturities, available-for-sale, at fair value	$	49,580		80.4	%	$	37,462		91.0	%
Equity securities, available-for-sale, at fair value		406		0.7	%		357		0.9	%
Equity securities, held for trading, at fair value		7,831		12.7	%		—		—
Policy loans, at outstanding balance		2,655		4.3	%		2,512		6.1	%
Mortgage loans, at cost		620		1.0	%		466		1.1	%
Limited partnerships, at fair value		197		0.3	%		177		0.4	%
Other investments		350		0.6	%		180		0.5	%
Total investments	$	61,639		100.0	%	$	41,154		100.0	%

Fixed maturity investments and equity securities held for trading increased 32% and 100%, respectively, since December 31, 2003, primarily the result of fixed maturities and equity securities that were reclassified from separate accounts to the general account as a result of the adoption of the SOP. The remaining increase in fixed maturity investments was primarily due to an increase in market prices driven by a decline in interest rates during the first quarter of 2004.

Investment Results

The following table summarizes Life’s investment results.

	First Quarter Ended
	March 31,
(Before-tax)	2004			2003
Net investment income – excluding income on policy loan and trading securities [1]	$	661		$	445
Policy loan income		45			58
Trading securities income [2]		495			—
Net investment income – total [1]	$	1,201		$	503
Yield on average invested assets [3]		5.7	%		6.1	%
Gross gains on sale	$	100		$	57
Gross losses on sale		(18	)		(47	)
Impairments		(8	)		(67	)
Periodic net coupon settlements on non-qualifying derivatives [1]		2			4
GMWB derivatives, net		(2	)		—
Other, net [4]		2			9
Net realized capital gains (losses) [1] [5]	$	76		$	(44	)

[1]	The prior period reflects the reclassification of periodic net coupon settlements on non-qualifying derivatives from net investment income to net realized capital gains (losses) to conform to the current year presentation.
[2]	Represents the change in value of securities classified as trading.
[3]	Represents annualized net investment income (excluding the change in fair value of trading securities) divided by average invested assets at cost or amortized cost, as applicable, for the first quarter ended March 31, 2004 and 2003. Average invested assets are calculated by dividing the sum of the beginning and ending period amounts by two, excluding trading securities and collateral received associated with the securities lending program.
[4]	Primarily consists of changes in fair value on non-qualifying derivatives and hedge ineffectiveness on qualifying derivative instruments as well as the amortization of deferred acquisition costs associated with realized capital gains (losses).
[5]	First quarter 2004 includes $5 of net realized gains (losses) associated with guaranteed separate accounts classified within the general account amounts pursuant to the adoption of the SOP .

For the quarter ended March 31, 2004, net investment income, excluding policy loans and trading securities, increased $216, or 49%, compared to the same period in 2003. Approximately $154 of the increase related to income earned on separate account assets reclassified to the general account as a result of the adoption of the SOP and approximately $26 of the increase related to income earned on assets acquired in the CNA acquisition, which was consummated on December 31, 2003. The remaining increase was primarily due to income earned on a higher invested asset base, as compared to the first quarter 2003, partially offset by lower investment yields. Yields on average invested assets decreased as a result of lower rates on new investment purchases and decreased policy loan income. Since the Company invests primarily in long-term fixed rate debt securities, current period changes in interest rates impact the yield on new asset purchases and, therefore, have a gradual impact on the overall portfolio yield. The weighted average yield on new invested asset purchases in the first quarter of 2004 of approximately 4.8%, before-tax, continues to be below the average portfolio yield.

Net realized capital gains (losses) for the first quarter ended March 31, 2004 improved by $120 compared to the same period in 2003, primarily the result of higher realized gains on sales of fixed maturity and equity securities and lower other-than-temporary impairments. Realized gains on sales of fixed maturity investments were concentrated in the corporate, foreign government and asset-backed securities (“ABS”) sectors. The majority of the sales in the corporate and ABS sectors were the

40

result of portfolio rebalancing that resulted in divesting of securities that had appreciated in value due to a decline in interest rates and an improved corporate credit environment. Foreign government securities were sold in the first quarter of 2004 primarily to realize gains associated with the decline in value of the U.S. Dollar against foreign currencies. (For further discussion of other-than-temporary impairments, see the Other-Than-Temporary Impairments commentary in this section of the MD&A.)

Property & Casualty

The investment objective for Property & Casualty’s ongoing operations is to maximize economic value while generating after-tax income and sufficient liquidity to meet policyholder and corporate obligations. For Property & Casualty’s Other Operations segment, the investment objective is to ensure the full and timely payment of all liabilities. Property & Casualty’s investment strategies are developed based on a variety of factors including business needs, regulatory requirements and tax considerations.

The following table identifies Property & Casualty’s invested assets by type as of March 31, 2004 and December 31, 2003.

Composition of Invested Assets

	March 31, 2004					December 31, 2003
	Amount		Percent			Amount		Percent
Fixed maturities, available-for-sale, at fair value	$	23,196		96.4	%	$	23,715		96.4	%
Equity securities, available-for-sale, at fair value		206		0.9	%		208		0.8	%
Real estate/Mortgage loans, at cost		309		1.3	%		328		1.3	%
Limited partnerships, at fair value		164		0.7	%		168		0.7	%
Other investments		177		0.7	%		186		0.8	%
Total investments	$	24,052		100.0	%	$	24,605		100.0	%

Total fixed maturities decreased 2% since December 31, 2003, primarily due to $1.15 billion of payments made pursuant to the MacArthur settlement, partially offset by premium cash flow and an increase in the fair value of fixed maturities as a result of a decrease in interest rates.

Investment Results

The table below summarizes Property & Casualty’s investment results.

	First Quarter Ended
	March 31,
	2004			2003
Net investment income, before-tax [1]	$	311		$	281
Net investment income, after-tax [1] [2]	$	232		$	215
Yield on average invested assets, before-tax [3]		5.5	%		5.8	%
Yield on average invested assets, after-tax [2] [3]		4.1	%		4.4	%
Gross gains on sale	$	72		$	80
Gross losses on sale		(5	)		(60	)
Impairments		(6	)		(22	)
Periodic net coupon settlements on non-qualifying derivatives [1]		4			4
Other, net [4]		6			(3	)
Net realized capital gains (losses), before-tax [1]	$	71		$	(1	)

[1]	The prior period reflects the reclassification of periodic net coupon settlements on non-qualifying derivatives from net investment income to net realized capital gains (losses) to conform to the current year presentation.
[2]	Due to significant holdings in tax-exempt investments, after-tax net investment income and yield are also included.
[3]	Represents annualized net investment income divided by average invested assets at cost or amortized cost, as applicable, for the first quarter ended March 31, 2004 and 2003. Average invested assets are calculated by dividing the sum of the beginning and ending period amounts by two, excluding the collateral obtained from the securities lending program.
[4]	Primarily consists of changes in fair value on non-qualifying derivatives and hedge ineffectiveness on qualifying derivative instruments.

For the first quarter ended March 31, 2004, before- and after-tax net investment income increased $30, or 11%, and $17, or 8%, respectively, compared to the prior year period. The increase in net investment income was primarily due to income earned on a higher invested asset base, partially offset by lower investment yields. Invested assets as of March 31, 2004 increased as compared to March 31, 2003, due to positive operating cash flow partially offset by payments made pursuant to the MacArthur settlement. Yields on average invested assets decreased from the prior year period as a result of lower rates on new investment purchases. Since the Company invests primarily in long-term fixed rate debt securities, current period changes in interest rates impact the yield on new asset purchases and, therefore, have a gradual impact on the overall portfolio yield. The weighted average yield on new asset purchases in the first quarter of 2004 of approximately 4.7%, before-tax, continues to be below the average portfolio yield.

Net realized capital gains (losses) for the first quarter ended March 31, 2004 improved by $72 compared to the same period in 2003, primarily the result of higher net realized gains on sales of fixed maturity securities and lower other-than-temporary

41

impairments. Realized gains on sales of fixed maturity investments were concentrated in the corporate, foreign government and ABS sectors. The majority of the sales in the corporate and ABS sectors were the result of portfolio rebalancing that resulted in divesting of securities that had appreciated in value due to a decline in interest rates and an improved corporate credit environment. Foreign government securities were sold in the first quarter of 2004 primarily to realize gains associated with the decline in value of the U.S. Dollar against foreign currencies. (For further discussion of other-than-temporary impairments, see the Other-than-Temporary Impairments commentary in this section of the MD&A.)

Corporate

Certain proceeds from the Company’s September 2002 and May 2003 capital raising activities have been retained in Corporate. As of March 31, 2004 and December 31, 2003, Corporate held $38 and $86, respectively, of short-term fixed maturity investments. In addition, Corporate held $28 and $2 of other investments as of March 31, 2004 and December 31, 2003, respectively.

Other-Than-Temporary Impairments

The following table identifies the Company’s other-than-temporary impairments by type.

Other-Than-Temporary Impairments by Type

	First Quarter Ended						First Quarter Ended
	March 31, 2004						March 31, 2003
			Property &						Property &
(before-tax)	Life		Casualty		Consolidated		Life		Casualty		Consolidated
ABS
Corporate debt obligations (“CDO”)	$	4	$	1	$	5	$	10	$	5	$	15
Credit card receivables		—		—		—		12		2		14
Other ABS		—		5		5		4		1		5
Total ABS		4		6		10		26		8		34
Corporate
Consumer non-cyclical		—		—		—		7		2		9
Technology and communications		—		—		—		3		2		5
Transportation		—		—		—		7		3		10
Other corporate		3		—		3		3		1		4
Total corporate		3		—		3		20		8		28
Equity		—		—		—		21		6		27
Mortgage-backed securities (“MBS”) – interest only securities		1		—		1		—		—		—
Total other-than-temporary impairments	$	8	$	6	$	14	$	67	$	22	$	89

ABS — During the first quarter of 2004, other-than-temporary impairments were recorded for various ABS security types as a result of a deterioration of cash flows derived from the underlying collateral of several securities. The decrease in impairments compared to the prior year period is primarily the result of a general stabilization in the performance of the underlying collateral, which has resulted in improved pricing levels. Pricing levels for CDOs recovered modestly during the first quarter of 2004 due to an increase in demand for these asset types, driven by improved economic and operating fundamentals of the underlying security issuers, better market liquidity and attractive yields. The increase in pricing levels for credit card receivables was primarily driven by improvement in collateral performance.

Impairments of ABS during the first quarter of 2003 were driven by a deterioration of collateral cash flows. CDO impairments were primarily the result of increasing default rates and lower recovery rates on the collateral. Impairments on ABS backed by credit card receivables were a result of issuers extending credit to sub-prime borrowers and the higher default rates on these loans.

Corporate — The decline in corporate bankruptcies and improvement in general economic conditions have contributed to lower corporate impairment levels in the first quarter of 2004 compared to the first quarter of 2003.

A significant portion of corporate impairments during the quarter ended March 31, 2003 was the result of one consumer non-cyclical issuer in the healthcare industry stemming from its decline in value due to accounting fraud, and one communications sector issuer in the cable television industry due to deteriorating earnings forecasts, debt restructuring issues and accounting irregularities. Additional impairments were incurred as a result of the deterioration in the transportation sector, specifically issuers of airline debt, as a result of a decline in airline travel.

Other — Other-than-temporary impairments were also recorded in the first quarter of 2003 on various diversified mutual funds and preferred stock investments.

In addition to the impairments described above, fixed maturity and equity securities were sold during the quarters ended March 31, 2004 and 2003 at total gross losses of $22 and $99, respectively. No single security was sold at a loss in excess of $5 and $9 during the quarters ended March 31, 2004 and 2003, respectively.

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INVESTMENT CREDIT RISK

The Hartford has established investment credit policies that focus on the credit quality of obligors and counterparties, limit credit concentrations, encourage diversification and require frequent creditworthiness reviews. Investment activity, including setting of policy and defining acceptable risk levels, is subject to regular review and approval by senior management and by the Finance Committee of the Company’s Board of Directors.

Please refer to the Investment Credit Risk section of the MD&A in The Hartford’s 2003 Form 10-K Annual Report for a description of the Company’s objectives, policies and strategies, including the use of derivative instruments.

The Company invests primarily in securities that are rated investment grade, and has established exposure limits, diversification standards and review procedures for all credit risks including borrower, issuer and counterparty. Creditworthiness of specific obligors is determined by an internal credit evaluation supplemented by consideration of external determinants of creditworthiness, typically ratings assigned by nationally recognized ratings agencies. Obligor, asset sector and industry concentrations are subject to established limits and are monitored on a regular basis. The Hartford is not exposed to any credit concentration risk of a single issuer greater than 10% of the Company’s stockholders’ equity.

The following table identifies fixed maturity securities by type on a consolidated basis as of March 31, 2004 and December 31, 2003.

Consolidated Fixed Maturities by Type

	March 31, 2004												December 31, 2003
										Percent of													Percent of
										Total												Total
	Amortized		Unrealized		Unrealized			Fair		Fair			Amortized		Unrealized		Unrealized			Fair		Fair
	Cost		Gains		Losses			Value		Value			Cost		Gains		Losses			Value		Value
ABS	$	6,276	$	168	$	(71	)	$	6,373		8.8	%	$	6,483	$	154	$	(113	)	$	6,524		8.9	%
CMBS		10,791		724		(20	)		11,495		15.8	%		10,230		545		(44	)		10,731		14.7	%
Collateralized mortgage obligation (“CMO”)		882		21		(1	)		902		1.2	%		1,059		17		(3	)		1,073		1.5	%
Corporate
Basic industry		3,333		278		(5	)		3,606		5.0	%		4,035		286		(15	)		4,306		5.9	%
Capital goods		2,076		179		(4	)		2,251		3.1	%		1,850		133		(11	)		1,972		2.7	%
Consumer cyclical		3,330		268		(4	)		3,594		4.9	%		3,167		210		(12	)		3,365		4.6	%
Consumer non-cyclical		3,373		298		(7	)		3,664		5.0	%		3,572		236		(18	)		3,790		5.2	%
Energy		2,070		190		(2	)		2,258		3.1	%		2,036		142		(10	)		2,168		3.0	%
Financial services		7,830		675		(27	)		8,478		11.6	%		7,767		536		(45	)		8,258		11.3	%
Technology and communications		5,001		561		(8	)		5,554		7.6	%		4,955		489		(18	)		5,426		7.5	%
Transportation		739		61		(4	)		796		1.1	%		777		51		(6	)		822		1.1	%
Utilities		3,110		269		(11	)		3,368		4.6	%		2,941		221		(20	)		3,142		4.3	%
Other		859		63		(1	)		921		1.3	%		720		33		(5	)		748		1.0	%
Government/Government agencies
Foreign		1,385		154		(4	)		1,535		2.1	%		1,605		171		(3	)		1,773		2.4	%
United States		1,292		41		—			1,333		1.8	%		1,401		33		(4	)		1,430		1.9	%
MBS – agency		2,415		55		—			2,470		3.4	%		2,794		43		(3	)		2,834		3.9	%
Municipal
Taxable		742		32		(9	)		765		1.1	%		625		19		(15	)		629		0.9	%
Tax-exempt		9,469		816		(3	)		10,282		14.1	%		9,445		775		(4	)		10,216		14.0	%
Redeemable preferred stock		71		3		—			74		0.1	%		77		3		—			80		0.1	%
Short-term		3,094		1		—			3,095		4.3	%		3,708		3		—			3,711		5.1	%
Total fixed maturities	$	68,138	$	4,857	$	(181	)	$	72,814		100.0	%	$	69,247	$	4,100	$	(349	)	$	72,998		100.0	%
Total general account fixed maturities													$	58,127	$	3,413	$	(277	)	$	61,263		83.9	%
Total guaranteed separate account fixed maturities [1]													$	11,120	$	687	$	(72	)	$	11,735		16.1	%

[1] Effective January 1, 2004, guaranteed separate account assets were included with general account assets as a result of adopting the SOP.

The Company’s fixed maturity gross unrealized gains and losses have improved by $757 and $168, respectively, from December 31, 2003 to March 31, 2004, primarily due to a decline in long-term interest rates and, to a lesser extent, credit spread tightening associated with ABS, partially offset by sales of securities in a gain position. During the quarter ended March 31, 2004, the ten year U.S. treasury rate declined approximately 40 basis points since December 31, 2003, largely due to disappointing new job creation and a capacity utilization percentage. The Company expects U.S. fiscal and monetary policy to remain stimulative until inflationary pressures return.

Investment allocations as a percentage of total fixed maturities have remained materially consistent since December 31, 2003, except for CMBS and short-term securities. CMBS increased as a result of a tactical decision to increase the Company’s investment in the asset class due to its stable spreads, high quality and attractive yields. Investments in short-term securities decreased

43

primarily due to payments made pursuant to the MacArthur settlement.

(For further discussion of risk factors associated with sectors with significant unrealized loss positions, see the sector risk factor commentary under the Consolidated Total Securities with Unrealized Loss Greater than Six Months by Type schedule in this section of the MD&A.)

The following table identifies fixed maturities by credit quality on a consolidated basis, as of March 31, 2004 and December 31, 2003. The ratings referenced below are based on the ratings of a nationally recognized rating organization or, if not rated, assigned based on the Company’s internal analysis of such securities.

Consolidated Fixed Maturities by Credit Quality

	March 31, 2004							December 31, 2003
					Percent of							Percent of
	Amortized				Total Fair			Amortized				Total Fair
	Cost		Fair Value		Value			Cost		Fair Value		Value
United States Government/Government agencies	$	4,662	$	4,777		6.6	%	$	5,274	$	5,357		7.3	%
AAA		15,799		16,854		23.1	%		15,672		16,552		22.7	%
AA		7,479		8,043		11.0	%		7,377		7,855		10.8	%
A		16,863		18,220		25.0	%		17,646		18,750		25.7	%
BBB		17,025		18,350		25.2	%		16,143		17,114		23.4	%
BB & below		3,216		3,475		4.8	%		3,427		3,659		5.0	%
Short-term		3,094		3,095		4.3	%		3,708		3,711		5.1	%
Total fixed maturities	$	68,138	$	72,814		100.0	%	$	69,247	$	72,998		100.0	%
Total general account fixed maturities								$	58,127	$	61,263		83.9	%
Total guaranteed separate account fixed maturities [1]								$	11,120	$	11,735		16.1	%

[1] Effective January 1, 2004, guaranteed separate account assets were included with general account assets as a result of adopting the SOP.

As of March 31, 2004 and December 31, 2003, greater than 95% and 95%, respectively, of the fixed maturity portfolio was invested in short-term securities or securities rated investment grade (BBB and above). The following table presents the Below Investment Grade (“BIG”) fixed maturities by type, as of March 31, 2004 and December 31, 2003.

Consolidated BIG Fixed Maturities by Type

	March 31, 2004							December 31, 2003
					Percent of							Percent of
	Amortized				Total Fair			Amortized				Total Fair
	Cost		Fair Value		Value			Cost		Fair Value		Value
ABS	$	233	$	239		6.9	%	$	293	$	275		7.5	%
CMBS		196		208		6.0	%		185		190		5.2	%
Corporate
Basic industry		364		385		11.0	%		365		381		10.4	%
Capital goods		181		189		5.4	%		177		187		5.1	%
Consumer cyclical		395		430		12.4	%		377		408		11.2	%
Consumer non-cyclical		350		367		10.6	%		423		442		12.1	%
Energy		115		124		3.6	%		113		123		3.4	%
Financial services		21		22		0.6	%		20		20		0.5	%
Technology and communications		379		454		13.1	%		418		505		13.8	%
Transportation		32		37		1.1	%		58		61		1.7	%
Utilities		465		488		14.0	%		529		549		15.0	%
Foreign government		429		476		13.7	%		416		463		12.7	%
Other		56		56		1.6	%		53		55		1.4	%
Total fixed maturities	$	3,216	$	3,475		100.0	%	$	3,427	$	3,659		100.0	%
Total general account fixed maturities								$	2,681	$	2,877		78.6	%
Total guaranteed separate account fixed maturities [1]								$	746	$	782		21.4	%

[1] Effective January 1, 2004, guaranteed separate account assets were included with general account assets as a result of adopting the SOP.

As of March 31, 2004 and December 31, 2003, the Company held no issuer of a BIG security with a fair value in excess of 3% of the total fair value for BIG securities. Total BIG securities decreased since December 31, 2003 as a result of tactical decisions to reduce exposure to lower credit quality assets and re-invest in investment grade securities.

The following table presents the Company’s unrealized loss aging for total fixed maturity and equity securities classified as available-for-sale on a consolidated basis, as of March 31, 2004 and December 31, 2003, by length of time the security was in an unrealized loss position.

44

Consolidated Unrealized Loss Aging of Total Securities

	March 31, 2004							December 31, 2003
	Amortized		Fair		Unrealized			Amortized		Fair		Unrealized
	Cost		Value		Loss			Cost		Value		Loss
Three months or less	$	3,596	$	3,551	$	(45	)	$	4,867	$	4,826	$	(41	)
Greater than three months to six months		233		229		(4	)		3,991		3,854		(137	)
Greater than six months to nine months		1,760		1,731		(29	)		404		382		(22	)
Greater than nine months to twelve months		235		225		(10	)		151		142		(9	)
Greater than twelve months		1,418		1,305		(113	)		1,844		1,688		(156	)
Total	$	7,242	$	7,041	$	(201	)	$	11,257	$	10,892	$	(365	)
Total general account								$	9,234	$	8,941	$	(293	)
Total guaranteed separate accounts [1]								$	2,023	$	1,951	$	(72	)

[1] Effective January 1, 2004, guaranteed separate account assets were included with general account assets as a result of adopting the SOP.

The decrease in the unrealized loss amount since December 31, 2003 is primarily the result of slightly improved pricing levels for ABS securities, a decline in long-term interest rates and, to a lesser extent, asset sales. (For further discussion, see the economic commentary under the Consolidated Fixed Maturities by Type table in this section of the MD&A.)

As of March 31, 2004 and December 31, 2003, fixed maturities represented $181, or 90%, and $349, or 96%, of the Company’s total unrealized loss associated with securities classified as available-for-sale, respectively. There were no fixed maturities as of March 31, 2004 or December 31, 2003 with a fair value less than 80% of the security’s amortized cost basis for six continuous months other than certain asset-backed and commercial mortgage-backed securities. Other-than-temporary impairments for certain asset-backed and commercial mortgage-backed securities are recognized if the fair value of the security, as determined by external pricing sources, is less than its carrying amount and there has been a decrease in the present value of the expected cash flows since the last reporting period. There were no asset-backed or commercial mortgage-backed securities included in the table above, as of March 31, 2004 and December 31, 2003, for which management’s best estimate of future cash flows adversely changed during the reporting period. As of March 31, 2004 and December 31, 2003, no asset-backed or commercial mortgage-backed securities had an unrealized loss in excess of $13 and $15, respectively. (For further discussion of the other-than-temporary impairments criteria, see “Investments” included in the Critical Accounting Estimates section of the MD&A and in Note 1 of Notes to Consolidated Financial Statements both of which are included in The Hartford’s 2003 Form 10-K Annual Report.)

The Company held no securities of a single issuer that were at an unrealized loss position in excess of 8% and 5% of the total unrealized loss amount as of March 31, 2004 and December 31, 2003, respectively.

The total securities classified as available-for-sale in an unrealized loss position for longer than six months by type as of March 31, 2004 and December 31, 2003 are presented in the following table.

Consolidated Total Securities with Unrealized Loss Greater Than Six Months by Type

	March 31, 2004										December 31, 2003
								Percent of										Percent of
								Total										Total
	Amortized		Fair					Unrealized			Amortized		Fair		Unrealized			Unrealized
	Cost		Value		Unrealized Loss			Loss			Cost		Value		Loss			Loss
ABS and CMBS
Aircraft lease receivables	$	149	$	98	$	(51	)		33.6	%	$	174	$	116	$	(58	)		31.0	%
CDOs		90		86		(4	)		2.6	%		176		153		(23	)		12.3	%
Credit card receivables		79		75		(4	)		2.6	%		123		111		(12	)		6.4	%
Other ABS and CMBS		851		835		(16	)		10.6	%		693		673		(20	)		10.7	%
Corporate
Financial services		952		910		(42	)		27.6	%		747		710		(37	)		19.8	%
Technology and communications		145		143		(2	)		1.3	%		55		52		(3	)		1.6	%
Transportation		70		66		(4	)		2.6	%		42		38		(4	)		2.1	%
Utilities		220		211		(9	)		5.9	%		103		95		(8	)		4.3	%
Other		562		550		(12	)		7.9	%		268		248		(20	)		10.7	%
Other securities		295		287		(8	)		5.3	%		18		16		(2	)		1.1	%
Total	$	3,413	$	3,261	$	(152	)		100.0	%	$	2,399	$	2,212	$	(187	)		100.0	%
Total general accounts											$	1,760	$	1,619	$	(141	)		75.4	%
Total guaranteed separate accounts [1]											$	639	$	593	$	(46	)		24.6	%

[1] Effective January 1, 2004, guaranteed separate account assets were included with general account assets as a result of adopting the SOP.

The ABS securities in an unrealized loss position for six months or more as of March 31, 2004 and December 31, 2003, were primarily supported by aircraft lease receivables, CDOs and credit card receivables. The Company’s current view of risk factors relative to these fixed maturity types is as follows:

45

Aircraft lease receivables — During the first quarter of 2004, securities supported by aircraft lease receivables sustained a modest increase in value, continuing an upward trend that began in the fourth quarter of 2003. This increase is primarily due to a modest improvement on certain aircraft lease rates, driven by greater demand for aircraft as a result of increased airline travel. In prior periods, these securities had suffered a considerable decrease in value as a result of a prolonged decline in airline travel and the uncertainty of a potential industry recovery. While the Company has seen modest price increases and greater liquidity in this sector during the first quarter of 2004 and fourth quarter of 2003, any additional price recovery will depend on continued improvement in economic fundamentals, political stability and airline operating performance.

CDOs — Pricing levels for CDOs recovered modestly during the first quarter of 2004 due to an increase in demand for these asset types, driven by improved economic and operating fundamentals of the underlying security issuers, better market liquidity and attractive yields.

Credit card receivables — The decrease in the unrealized loss position in credit card securities during the first quarter of 2004 is primarily the result of an increase in pricing levels, driven by an improvement in collateral performance. While the unrealized loss position has improved for these holdings, concerns remain regarding the long-term viability of certain issuers within this sub-sector.

As of March 31, 2004 and December 31, 2003, security types other than ABS and CMBS that were in a significant unrealized loss position for greater than six months were corporate fixed maturities primarily within the financial services sector.

Financial services — As of March 31, 2004, the securities in the financial services sector unrealized loss position for greater than six months were comprised of approximately 60 different securities. The securities in this category are primarily investment grade and the majority of these securities are priced at or greater than 90% of amortized cost as of March 31, 2004. These positions are primarily variable rate securities with extended maturity dates, which have been adversely impacted by the reduction in forward interest rates resulting in lower expected cash flows. Unrealized loss amounts for these securities have increased during the first quarter of 2004 as interest rates have declined. Additional changes in fair value of these securities are primarily dependent on future changes in forward interest rates. A substantial percentage of these securities are currently hedged with interest rate swaps, which convert the variable rate earned on the securities to a fixed amount. The swaps receive cash flow hedge accounting treatment and are currently in an unrealized gain position.

As part of the Company’s ongoing security monitoring process by a committee of investment and accounting professionals, the Company has reviewed its investment portfolio and concluded that there were no additional other-than-temporary impairments as of March 31, 2004 and December 31, 2003. Due to the issuers’ continued satisfaction of the securities’ obligations in accordance with their contractual terms and the expectation that they will continue to do so, management’s intent and ability to hold these securities, as well as the evaluation of the fundamentals of the issuers’ financial condition and other objective evidence, the Company believes that the prices of the securities in the sectors identified above were temporarily depressed.

The evaluation for other-than-temporary impairments is a quantitative and qualitative process, which is subject to risks and uncertainties in the determination of whether declines in the fair value of investments are other-than-temporary. The risks and uncertainties include changes in general economic conditions, the issuer’s financial condition or near term recovery prospects and the effects of changes in interest rates. In addition, for securitized financial assets with contractual cash flows (e.g. ABS and CMBS), projections of expected future cash flows may change based upon new information regarding the performance of the underlying collateral. As of March 31, 2004 and December 31, 2003, management’s expectation of the discounted future cash flows on these securities was in excess of the associated securities’ amortized cost. (For further discussion, see “Investments” included in the Critical Accounting Estimates section of MD&A and in Note 1 of Notes to Consolidated Financial Statements both of which are included in The Hartford’s 2003 Form 10-K Annual Report.)

The following table presents the Company’s unrealized loss aging for BIG and equity securities classified as available-for-sale on a consolidated basis, as of March 31, 2004 and December 31, 2003.

Consolidated Unrealized Loss Aging of BIG and Equity Securities

	March 31, 2004							December 31, 2003
	Amortized		Fair		Unrealized			Amortized		Fair		Unrealized
	Cost		Value		Loss			Cost		Value		Loss
Three months or less	$	300	$	292	$	(8	)	$	133	$	129	$	(4	)
Greater than three months to six months		43		41		(2	)		134		129		(5	)
Greater than six months to nine months		54		52		(2	)		81		73		(8	)
Greater than nine months to twelve months		75		67		(8	)		18		17		(1	)
Greater than twelve months		271		229		(42	)		417		349		(68	)
Total	$	743	$	681	$	(62	)	$	783	$	697	$	(86	)
Total general accounts								$	663	$	593	$	(70	)
Total guaranteed separate accounts [1]								$	120	$	104	$	(16	)

[1] Effective January 1, 2004, guaranteed separate account assets were included with general account assets as a result of adopting the SOP.

Similar to the decrease in the Consolidated Unrealized Loss Aging of Total Securities table from December 31, 2003 to March 31, 2004, the decrease in the BIG and equity security unrealized loss amount for securities classified as available-for-sale was primarily the result of slightly improved pricing levels for ABS securities, a decline in long-term interest rates and, to a lesser extent, asset sales. (For further discussion, see the economic

46

commentary under the Consolidated Fixed Maturities by Type table in this section of the MD&A.)

The BIG and equity securities classified as available-for-sale in an unrealized loss position for longer than six months by type as of March 31, 2004 and December 31, 2003 are presented in the following table.

Consolidated BIG and Equity Securities with Unrealized Loss Greater Than Six Months by Type

	March 31, 2004										December 31, 2003
								Percent of										Percent of
								Total										Total
	Amortized		Fair		Unrealized			Unrealized			Amortized		Fair		Unrealized			Unrealized
	Cost		Value		Loss			Loss			Cost		Value		Loss			Loss
ABS and CMBS
Aircraft lease receivables	$	31	$	17	$	(14	)		26.9	%	$	55	$	36	$	(19	)		24.6	%
CDOs		22		21		(1	)		1.9	%		44		34		(10	)		13.0	%
Credit card receivables		42		38		(4	)		7.7	%		45		34		(11	)		14.3	%
Other ABS and CMBS		40		33		(7	)		13.6	%		59		49		(10	)		13.0	%
Corporate
Financial services		143		125		(18	)		34.6	%		142		128		(14	)		18.2	%
Transportation		4		3		(1	)		1.9	%		21		18		(3	)		3.9	%
Utilities		56		51		(5	)		9.6	%		76		70		(6	)		7.8	%
Other		60		58		(2	)		3.8	%		69		65		(4	)		5.2	%
Other securities		2		2		—			—			5		5		—			—
Total	$	400	$	348	$	(52	)		100.0	%	$	516	$	439	$	(77	)		100.0	%
Total general accounts											$	417	$	355	$	(62	)		80.5	%
Total guaranteed separate accounts [1]											$	99	$	84	$	(15	)		19.5	%

[1] Effective January 1, 2004, guaranteed separate account assets were included with general account assets as a result of adopting the SOP.

For a discussion of the Company’s current view of risk factors relative to certain security types listed above, please refer to the Consolidated Total Securities with Unrealized Loss Greater Than Six Months by Type table in this section of the MD&A.

CAPITAL MARKETS RISK MANAGEMENT

The Hartford has a disciplined approach to managing risks associated with its capital markets and asset/liability management activities. Investment portfolio management is organized to focus investment management expertise on specific classes of investments, while asset/liability management is the responsibility of dedicated risk management units supporting Life and Property & Casualty operations. Derivative instruments are utilized in compliance with established Company policy and regulatory requirements and are monitored internally and reviewed by senior management.

Market Risk

The Hartford has material exposure to both interest rate and equity market risk. The Company analyzes interest rate risk using various models including multi-scenario cash flow projection models that forecast cash flows of the liabilities and their supporting investments, including derivative instruments. (For further discussion of market risk see the Capital Markets Risk Management section of MD&A in The Hartford’s 2003 Form 10-K Annual Report.) There have been no material changes in market risk exposures from December 31, 2003.

Derivative Instruments

The Hartford utilizes a variety of derivative instruments, including swaps, caps, floors, forwards and exchange traded futures and options, in compliance with Company policy and regulatory requirements designed to achieve one of four Company approved objectives: to hedge risk arising from interest rate, price or currency exchange rate volatility; to manage liquidity, to control transaction costs; or to enter into replication transactions. The Company does not make a market or trade in these instruments for the express purpose of earning short term trading profits. (For further discussion on The Hartford’s use of derivative instruments, refer to Note 2 of Notes to Condensed Consolidated Financial Statements.)

Life’s Equity Risk

The Company’s operations are significantly influenced by changes in the equity markets. The Company’s profitability depends largely on the amount of assets under management, which is primarily driven by the level of sales, equity market appreciation and depreciation and the persistency of the in-force block of business. Prolonged and precipitous declines in the equity markets can have a significant impact on the Company’s operations, as sales of variable products may decline and surrender activity may increase, as customer sentiment towards the equity market turns negative. Lower assets under management will have a negative impact on the Company’s financial results, primarily due to lower fee income related to the Retail Products Group and Institutional Solutions Group and, to a lesser extent, Individual Life segments, where a heavy concentration of equity linked products are administered and sold. Furthermore, the Company may experience a reduction in profit margins if a significant portion of the assets held in the variable annuity separate accounts move to the general account and the Company is unable to earn an acceptable investment spread,

47

particularly in light of the low interest rate environment and the presence of contractually guaranteed minimum interest credited rates, which for the most part are at a 3% rate.

In addition, prolonged declines in the equity market may also decrease the Company’s expectations of future gross profits, which are utilized to determine the amount of DAC to be amortized in a given financial statement period. A significant decrease in the Company’s estimated gross profits would require the Company to accelerate the amount of DAC amortization in a given period, potentially causing a material adverse deviation in that period’s net income. Although an acceleration of DAC amortization would have a negative impact on the Company’s earnings, it would not affect the Company’s cash flow or liquidity position.

Additionally, the Retail Products Group segment sells variable annuity contracts that offer various guaranteed death benefits. For certain guaranteed death benefits, the Company pays the greater of (1) the account value at death; (2) the sum of all premium payments less prior withdrawals; or (3) the maximum anniversary value of the contract, plus any premium payments since the contract anniversary, minus any withdrawals following the contract anniversary. For certain guaranteed death benefits sold with variable annuity contracts beginning in June of 2003, the Company pays the greater of (1) the account value at death; or (2) the maximum anniversary value; not to exceed the account value plus the greater of (a) 25% of premium payments, or (b) 25% of the maximum anniversary value of the contract. The Company currently reinsures a significant portion of these death benefit guarantees associated with its in-force block of business. The Company maintains a liability for the death benefit costs, net of reinsurance, of $117, as of March 31, 2004. Declines in the equity market may increase the Company’s net exposure to death benefits under these contracts.

The Retail Products Group segment’s total gross exposure (i.e. before reinsurance) to these guaranteed death benefits as of March 31, 2004 is $10.5 billion. Due to the fact that 80% of this amount is reinsured, the net exposure is $2.0 billion. This amount is often referred to as the net amount at risk. However, the Company will incur these guaranteed death benefit payments in the future only if the policyholder has an in-the-money guaranteed death benefit at their time of death.

In addition, the Company offers certain variable annuity products with a GMWB rider. Declines in the equity market may increase the Company’s exposure to benefits under the GMWB contracts. For all contracts in effect through July 6, 2003, the Company entered into a reinsurance arrangement to offset its exposure to the GMWB for the remaining lives of those contracts. As of July 6, 2003, the Company exhausted all but a small portion of the reinsurance capacity for new business under the current arrangement and will be ceding only a very small number of new contracts subsequent to July 6, 2003. Substantially all new contracts with the GMWB are not covered by reinsurance. These unreinsured contracts are expected to generate volatility in net income as the underlying embedded derivative liabilities are recorded at fair value each reporting period, resulting in the recognition of net realized capital gains or losses in response to changes in certain critical factors including capital market conditions and policyholder behavior. In order to minimize the volatility associated with the unreinsured GMWB liabilities, the Company established an alternative risk management strategy. During the third quarter of 2003, the Company began hedging its unreinsured GMWB exposure using interest rate futures, Standard and Poor’s (“S&P”) 500 and NASDAQ index options and futures contracts. During the first quarter of 2004, the Company entered into Europe, Asia and Far East (“EAFE”) Index swaps to hedge GMWB exposure to international equity markets.

The net impact of the change in value of the embedded derivative, net of the results of the hedging program was a $2 loss before deferred policy acquisition costs and tax effects for the three months ended March 31, 2004.

CAPITAL RESOURCES AND LIQUIDITY

Capital resources and liquidity represent the overall financial strength of The Hartford and its ability to generate strong cash flows from each of the business segments, borrow funds at competitive rates and raise new capital to meet operating and growth needs.

Liquidity Requirements

The liquidity requirements of The Hartford have been and will continue to be met by funds from operations as well as the issuance of commercial paper, common stock, debt securities and borrowings from its credit facilities. The principal sources of operating funds are premiums and investment income, while investing cash flows originate from maturities and sales of invested assets.

The Hartford endeavors to maintain a capital structure that provides financial and operational flexibility to its insurance subsidiaries, ratings that support its competitive position in the financial services marketplace (see the Ratings section below for further discussion), and strong shareholder returns. As a result, the Company may from time to time raise capital from the issuance of stock, debt or other capital securities. The issuance of common stock, debt or other capital securities could result in the dilution of shareholder interests or reduced net income due to additional interest expense.

The Hartford Financial Services Group, Inc. (“HFSG”) and HLI are holding companies which rely upon operating cash flow in the form of dividends from their subsidiaries, which enable them to service debt, pay dividends, and pay certain business expenses.

Dividends to HFSG from its subsidiaries are restricted. The payment of dividends by Connecticut-domiciled insurers is limited under the insurance holding company laws of Connecticut. Under these laws, the insurance subsidiaries may only make their dividend payments out of unassigned surplus. These laws require notice to and approval by the state insurance commissioner for the declaration or payment of any dividend, which, together with other dividends or distributions made within the preceding twelve months, exceeds the greater of (i) 10% of the insurer’s policyholder surplus as of December 31 of the preceding year or (ii) net income (or net gain from operations, if such company is a life insurance company) for the twelve-month period ending on the thirty-first day of December last preceding, in each case determined under statutory

48

insurance accounting policies. In addition, if any dividend of a Connecticut-domiciled insurer exceeds the insurer’s earned surplus, it requires the prior approval of the Connecticut Insurance Commissioner. The insurance holding company laws of the other jurisdictions in which The Hartford’s insurance subsidiaries are incorporated (or deemed commercially domiciled) generally contain similar (although in certain instances somewhat more restrictive) limitations on the payment of dividends. Through April 30, 2004, the Company’s insurance subsidiaries had paid $301 to HFSG and HLI and are permitted to pay up to a maximum of approximately $1.1 billion in dividends to HFSG and HLI for the remainder of 2004 without prior approval from the applicable insurance commissioner.

The primary uses of funds are to pay claims, policy benefits, operating expenses and commissions and to purchase new investments. The Hartford has a policy of carrying a significant short-term investment position and accordingly does not anticipate selling intermediate and long-term fixed maturity investments to meet its liquidity needs. (For a discussion of the Company’s investment objectives and strategies, see the Investments and Capital Markets Risk Management sections.)

Sources of Liquidity

Shelf Registrations

On December 3, 2003, The Hartford’s shelf registration statement (Registration No. 333-108067) for the potential offering and sale of debt and equity securities in an aggregate amount of up to $3.0 billion was declared effective by the Securities and Exchange Commission. The Registration Statement allows for the following types of securities to be offered: (i) debt securities, preferred stock, common stock, depositary shares, warrants, stock purchase contracts, stock purchase units and junior subordinated deferrable interest debentures of the Company, and (ii) preferred securities of any of one or more capital trusts organized by The Hartford (“The Hartford Trusts”). The Company may enter into guarantees with respect to the preferred securities of any of The Hartford Trusts.

In January 2004, the Company issued approximately 6.7 million shares of common stock pursuant to an underwritten offering at a price to the public of $63.25 per share and received net proceeds of $411. On March 9, 2004, the Company issued $200 of 4.75% senior notes due March 1, 2014. As of March 31, 2004, the Company had $2.4 billion remaining on its shelf.

On May 15, 2001, HLI filed with the SEC a shelf registration statement for the potential offering and sale of up to $1.0 billion in debt and preferred securities. The registration statement was declared effective on May 29, 2001. As of March 31, 2004, HLI had $1.0 billion remaining on its shelf.

Commercial Paper and Revolving Credit Facilities

The table below details the Company’s short-term debt programs and the applicable balances outstanding.

							Outstanding
							As of
	Effective		Expiration		Maximum		March 31,		December 31,
Description	Date		Date		Available		2004		2003		Change
Commercial Paper
The Hartford		11/10/86		N/A	$	2,000	$	373	$	850		(56	%)
HLI		2/7/97		N/A		250		—		—		—
Total commercial paper					$	2,250	$	373	$	850		(56	%)
Revolving Credit Facility
5-year revolving credit facility		6/20/01		6/20/06	$	1,000	$	—	$	—		—
3-year revolving credit facility		12/31/02		12/31/05		490		—		—		—
Total revolving credit facility					$	1,490	$	—	$	—		—
Total Outstanding Commercial Paper and Revolving Credit Facility					$	3,740	$	373	$	850	$	(56	%)

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

There have been no material changes to the Company’s off-balance sheet arrangements and aggregate contractual obligations since the filing of the Company’s 2003 Form 10-K Annual Report.

Pension Plans and Other Postretirement Benefits

While the Company has significant discretion in making voluntary contributions to the Plan, the Employee Retirement Income Security Act of 1974 regulations mandate minimum contributions in certain circumstances. On April 10, 2004, the Pension Funding Equity Act of 2004 was signed into law. This Act provided pension funding relief by replacing the defunct 30-year Treasury bond rate with a composite rate based on conservatively invested long-term corporate bonds. As a result of the passage of this legislation, the Company’s minimum funding requirement in 2004 has been eliminated.

On April 15, 2004 the Company made a $312 voluntary contribution into its U.S. qualified defined benefit pension plan. No additional contributions are expected to be paid during the current fiscal year.

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Capitalization

The capital structure of The Hartford as of March 31, 2004 and December 31, 2003 consisted of debt and equity, summarized as follows:

	March 31,			December 31,
	2004			2003			Change
Short-term debt (includes current maturities of long-term debt)	$	573		$	1,050			(45	%)
Long-term debt		4,580			4,613			(1	%)
Total debt	$	5,153		$	5,663			(9	%)
Equity excluding accumulated other comprehensive income, net of tax (“AOCI”)	$	11,369		$	10,393			9	%
AOCI		2,168			1,246			74	%
Total stockholders’ equity	$	13,537		$	11,639			16	%
Total capitalization including AOCI	$	18,690		$	17,302			8	%
Debt to equity		38	%		49	%
Debt to capitalization		28	%		33	%

The Hartford’s total capitalization increased $1.4 billion as of March 31, 2004 as compared with December 31, 2003. This increase was due to an increase in stockholders’ equity partially offset by a decrease in debt. The increase in total stockholders’ equity is primarily due to an increase in AOCI of $922, issuance of common stock of $411 and net income of $568. The increase in AOCI is primarily a result of an increase in unrealized gains of $574 and Life’s adoption of SOP 03-1, which resulted in a $292 cumulative effect on unrealized gains on securities in the first quarter of 2004 related to the reclassification of investments from separate account assets to general account assets. The decrease in total debt reflects repayments of commercial paper of $477 and the redemption of $250 of junior subordinated debentures, partially offset by issuance of $199 in long-term debt.

Debt

The following discussion describes the Company’s debt financing activities for the first quarter of 2004.

On March 15, 2004, HLI redeemed its 7.2% junior subordinated debentures underlying the trust preferred securities issued by Hartford Life Capital I.

During the quarter ended March 31, 2004, the Company repaid $477 of commercial paper utilizing the proceeds from the equity offering and internal sources.

On March 9, 2004, the Company issued 4.75% senior notes due March 1, 2014 and received net proceeds of $197. Interest on the notes is payable semi-annually on March 1 and September 1, commencing on September 1, 2004.

For additional information regarding debt, see Note 8 of Notes to Consolidated Financial Statements in The Hartford’s 2003 Form 10-K Annual Report.

Stockholders’ Equity

Issuance of Common Stock — On January 22, 2004, The Hartford issued approximately 6.3 million shares of common stock pursuant to an underwritten offering at a price to the public of $63.25 per share and received net proceeds of $388. Subsequently, on January 30, 2004, The Hartford issued approximately 377 thousand shares of common stock pursuant to an underwritten offering at a price to the public of $63.25 per share and received net proceeds of $23. The Company used the proceeds from these issuances to repay $411 of commercial paper issued in connection with the acquisition of the group life and accident, and short-term and long-term disability business of CNA Financial Corporation.

Dividends — On February 19, 2004, The Hartford declared a dividend on its common stock of $0.28 per share payable on April 1, 2004 to shareholders of record as of March 1, 2004.

AOCI - AOCI increased by $922 as of March 31, 2004 compared with December 31, 2003. The increase in AOCI is primarily a result of an increase in unrealized gains of $574 and Life’s adoption of SOP 03-1, which resulted in a $292 cumulative effect on unrealized gains on securities in the first quarter of 2004 related to the reclassification of investments from separate account assets to general account assets.

The funded status of the Company’s pension and postretirement plans is dependent upon many factors, including returns on invested assets and the level of market interest rates. Declines in the value of securities traded in equity markets coupled with declines in long-term interest rates have had a negative impact on the funded status of the plans. As a result, the Company recorded a minimum pension liability as of March 31, 2004 and December 31, 2003, which resulted in an after-tax reduction of stockholders’ equity of $375. This minimum pension liability did not affect the Company’s results of operations.

For additional information on stockholders’ equity and AOCI see Notes 9 and 19, respectively, of Notes to Consolidated Financial Statements in The Hartford’s 2003 Form 10-K Annual Report.

Cash Flow

	First Quarter Ended March 31,
	2004			2003
Net cash provided by operating activities	$	99		$	667
Net cash provided by (used for) investing activities	$	386		$	(1,607	)
Net cash provided by (used for) financing activities	$	(307	)	$	1,216
Cash – end of period	$	638		$	655

The decrease in cash from operating activities was primarily the result of the funding of $1.15 billion in settlement of the MacArthur litigation partially offset by net income in 2004. Financing activities decreased primarily due to decreased proceeds from investment and universal life-type contracts and capital raising activities relating to issuance of common stock and long-term debt offset by repayments on commercial paper and early retirement of junior subordinated debentures. The increase in cash

50

from financing activities and settlement of the MacArthur litigation accounted for the majority of the change in cash from investing activities.

Operating cash flows for the quarters ended March 31, 2004 and 2003 have been adequate to meet liquidity requirements.

Equity Markets

For a discussion of the potential impact of the equity markets on capital and liquidity, see the Capital Markets Risk Management section under “Market Risk”.

Ratings

Ratings are an important factor in establishing the competitive position in the insurance and financial services marketplace. There can be no assurance that the Company’s ratings will continue for any given period of time or that they will not be changed. In the event the Company’s ratings are downgraded, the level of revenues or the persistency of the Company’s business may be adversely impacted.

The following table summarizes The Hartford’s significant member companies’ financial ratings from the major independent rating organizations as of April 30, 2004.

	A.M.		Standard
	Best	Fitch	& Poor’s	Moody’s
Insurance Financial Strength Ratings:
Hartford Fire	A+	AA	AA-	Aa3
Hartford Life Insurance Company	A+	AA	AA-	Aa3
Hartford Life and Accident	A+	AA	AA-	Aa3
Hartford Life Group Insurance Company	A+	AA	AA-	—
Hartford Life and Annuity	A+	AA	AA-	Aa3
Hartford Life Insurance KK	—	—	AA-	—
Other Ratings:
The Hartford Financial Services Group, Inc.:
Senior debt	a-	A	A-	A3
Commercial paper	AMB-2	F1	A-2	P-2
Hartford Capital III trust originated preferred securities	bbb	A-	BBB	Baa1
Hartford Life, Inc.:
Senior debt	a-	A	A-	A3
Commercial paper	—	F1	A-2	P-2
Hartford Life, Inc.:
Capital II trust preferred securities	bbb	A-	BBB	Baa1
Hartford Life Insurance Company:
Short Term Rating	—	—	A-1+	P-1

These ratings are not a recommendation to buy or hold any of The Hartford’s securities and they may be revised or revoked at any time at the sole discretion of the rating organization.

The agencies consider many factors in determining the final rating of an insurance company. One consideration is the relative level of statutory surplus necessary to support the business written. Statutory surplus represents the capital of the insurance company reported in accordance with accounting practices prescribed by the applicable state insurance department.

The table below sets forth statutory surplus for the Company’s insurance companies.

	March 31,		December 31,
(in billions)	2004		2003
Life Operations	$	4.6	$	4.5
Property & Casualty Operations		6.1		5.9
Total	$	10.7	$	10.4

Contingencies

Regulatory Developments — There continues to be significant federal and state regulatory activity relating to financial services companies, particularly mutual funds companies. These regulatory inquiries have focused on a number of mutual fund issues. The Company has received requests for information and subpoenas from the Securities and Exchange Commission (“SEC”), a subpoena from the New York Attorney General’s Office, and requests for information from the Connecticut Securities and Investments Division of the Department of Banking, in each case requesting documentation and other information regarding various mutual fund regulatory issues. Representatives from the SEC’s Office of Compliance Inspections and Examinations continue to request documents and information in connection with their ongoing compliance examination. In addition, the SEC’s Division of Enforcement has commenced an investigation of the Company’s variable annuity and mutual fund operations. The Company continues to cooperate fully with the SEC and other regulatory agencies.

The Company’s mutual funds are available for purchase by the separate accounts of different variable life insurance policies, variable annuity products, and funding agreements, and they are offered directly to certain qualified retirement plans. Although existing products contain transfer restrictions between subaccounts, some products, particularly older variable annuity products, do not contain restrictions on the frequency of transfers. In addition, as a result of the settlement of litigation against the Company with respect to certain owners of older variable annuity products, the Company’s ability to restrict transfers by these owners is limited.

A number of companies have announced settlements of enforcement actions with various regulatory agencies, primarily the SEC and the New York Attorney General’s Office. While no such action has been initiated against the Company, it is possible that the SEC or one or more other regulatory agencies may pursue action against the Company in the future. If such an action is brought, it could have a material effect on the Company.

For further information on other contingencies, see Note 16 of Notes to Consolidated Financial Statements included in The Hartford’s 2003 Form 10-K Annual Report.

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ACCOUNTING STANDARDS

For a discussion of accounting standards, see Note 1 of Notes to Condensed Consolidated Financial Statements.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information contained in the Capital Markets Risk Management section of Management’s Discussion and Analysis of Financial Condition and Results of Operations is incorporated herein by reference.

Item 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

The Company’s principal executive officer and its principal financial officer, based on their evaluation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) have concluded that the Company’s disclosure controls and procedures are adequate and effective for the purposes set forth in the definition thereof in Exchange Act Rule 13a-15(e) as of March 31, 2004.

Change in internal control over financial reporting

There was no change in the Company’s internal control over financial reporting that occurred during the first quarter of 2004 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

The Hartford is involved in claims litigation arising in the ordinary course of business, both as a liability insurer defending third-party claims brought against insureds and as an insurer defending coverage claims brought against it. The Hartford accounts for such activity through the establishment of unpaid claim and claim adjustment expense reserves. Subject to the uncertainties discussed in Note 16 of Notes to Condensed Consolidated Financial Statements under the caption “Asbestos and Environmental Claims” in The Hartford’s 2003 Annual Report Form 10-K, management expects that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and costs of defense, will not be material to the consolidated financial condition, results of operations or cash flows of The Hartford.

The Hartford is also involved in other kinds of legal actions, some of which assert claims for substantial amounts. These actions include, among others, putative state and federal class actions seeking certification of a state or national class. Such putative class actions have alleged, for example, underpayment of claims or improper underwriting practices in connection with various kinds of insurance policies, such as personal and commercial automobile, premises liability, and inland marine, and improper sales practices in connection with the sale of life insurance and other investment products. The Hartford also is involved in individual actions in which punitive damages are sought, such as claims alleging bad faith in the handling of insurance claims. Management expects that the ultimate liability, if any, with respect to such lawsuits, after consideration of provisions made for potential losses and costs of defense, will not be material to the consolidated financial condition of The Hartford. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s consolidated results of operations or cash flows in particular quarterly or annual periods.

As further discussed in the MD&A under the caption “Other Operations,” The Hartford continues to receive asbestos and environmental claims that involve significant uncertainty regarding policy coverage issues. Regarding these claims, The Hartford continually reviews its overall reserve levels, methodologies and reinsurance coverages. Because of the significant uncertainties which limit the ability of insurers and reinsurers to estimate the ultimate reserves necessary for unpaid losses and related expenses, principally those related to asbestos, the ultimate liabilities may exceed the currently recorded reserves. Any such additional liability (or any range of additional amounts) cannot be reasonably estimated now but could be material to The Hartford’s future consolidated operating results, financial condition and liquidity.

The MacArthur Litigation – On December 19, 2003, Hartford Accident and Indemnity Company (“Hartford A&I”) entered into a conditional settlement to resolve all claims relating to general liability policies that Hartford A&I issued to Mac Arthur Company and its subsidiary, Western MacArthur Company, both former regional distributors of asbestos products (collectively or individually, “MacArthur”), during the period 1967 to 1976. MacArthur had filed a pre-negotiated bankruptcy and plan of reorganization in November 2002 pursuant to a settlement with another of its insurers, United States Fidelity and Guaranty Company. The Hartford settlement was contingent on the occurrence of certain conditions, including the entry of final, non-appealable court orders approving the settlement agreement and confirming a bankruptcy plan under which, among other things, all claims against the Company relating to the asbestos liability of MacArthur would be enjoined. Under the settlement agreement, Hartford A&I paid $1.15 billion into an escrow account in the first quarter of 2004, pending the occurrence of the conditions. On April 22, 2004, all conditions to the settlement were satisfied, and the escrowed funds were disbursed to a trust established for the benefit of present and future asbestos claimants pursuant to the bankruptcy plan. The completion by the Company of the settlement resolves all disputes concerning Hartford A&I’s alleged obligations arising from MacArthur’s asbestos liability.

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Bancorp Services, LLC – In the third quarter of 2003, Hartford Life Insurance Company and its affiliate International Corporate Marketing Group, LLC settled their intellectual property dispute with Bancorp Services, LLC (“Bancorp”). The dispute concerned, among other things, Bancorp’s claims for alleged patent infringement, breach of a confidentiality agreement, and misappropriation of trade secrets related to certain stable value corporate-owned life insurance products. The settlement provided that The Hartford would pay a minimum of $70 and a maximum of $80, depending on the outcome of a patent appeal, to resolve all disputes between the parties. The settlement resulted in the recording of an additional charge of $40, after-tax, in the third quarter of 2003, reflecting the maximum amount payable under the settlement, and in November of 2003, The Hartford paid the initial $70 of the settlement. On March 1, 2004, the Federal Circuit Court of Appeals decided the patent appeal adversely to The Hartford, and on March 22, 2004, The Hartford paid Bancorp an additional $10 in full and final satisfaction of its obligations under the settlement. Because the charge taken in the third quarter of 2003 reflected the maximum amount payable under the settlement, the amount paid in the first quarter of 2004 had no effect on the Company’s results of operations.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits – See Exhibit Index on page 55.

(b) Reports on Form 8-K:

During the quarter ended March 31, 2004, the Company filed the following Current Reports on Form 8-K:

Filed January 30, 2004, Item 7, Financial Statements and Exhibit, to file and incorporate by reference certain exhibits into the Registration Statement on Form S-3 (File No. 333-108067), as amended, of The Hartford Financial Services Group, Inc., Hartford Capital IV, Hartford Capital V and Hartford Capital VI.

Filed March 12, 2004, Item 7, Financial Statements and Exhibit, to file and incorporate by reference certain exhibits into the Registration Statement on Form S-3 (File No. 333-108067), as amended, of The Hartford Financial Services Group, Inc., Hartford Capital IV, Hartford Capital V and Hartford Capital VI.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

The Hartford Financial Services Group, Inc.
(Registrant)
 

/s/ Robert J. Price  

Robert J. Price 

Senior Vice President and Controller 

May 4, 2004

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.
FOR THE FIRST QUARTER ENDED MARCH 31, 2004
FORM 10-Q

EXHIBITS INDEX

Exhibit No.	Description
10.01	Form of Employment Agreement, dated as of July 1, 1997, and amended as of February 6, 2004 between The Hartford and Ramani Ayer.
10.02	Form of Employment Agreement, dated as of July 1, 1997, and amended as of February 17, 2004 between The Hartford and David K. Zwiener.
10.03	Form of Employment Agreement, dated as of July 1, 2000, and amended as of January 29, 2004 between The Hartford and Thomas M. Marra.
10.04	Form of Employment Agreement, dated as of March 20, 2001, and amended as of February 18, 2004 between The Hartford and Neal S. Wolin.
10.05	Form of Employment Agreement, dated as of April 26, 2001, and amended as of February 10, 2004 between The Hartford and David M. Johnson.
10.06	Form of Employment Agreement, dated as of November 5, 2001, and amended as of February 25, 2004 between The Hartford and David M. Znamierowski.
10.07	Form of Key Executive Employment Protection Agreement between The Hartford and certain executive officers of The Hartford.
10.08	The Hartford Senior Executive Severance Pay Plan, as amended.
10.09	The Hartford Incentive Stock Plan, as amended.
15.01	Deloitte & Touche LLP Letter of Awareness.
31.01	Certification of Ramani Ayer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.02	Certification of David M. Johnson pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.01	Certification of Ramani Ayer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.02	Certification of David M. Johnson pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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EX-10.01

Exhibit 10.01

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT, dated as of July 1, 1997, by and between The Hartford Financial Services Group, Inc., a Delaware corporation (the “Company”), and Ramani Ayer (“Executive”).

W I T N E S S E T H:

          WHEREAS, the Company wishes to recognize the substantial services that Executive has provided to the Company; and

          WHEREAS, the Company desires that Executive continue to perform such services and to enter into an agreement embodying the terms of such employment (the “Agreement”); and

          WHEREAS, Executive desires to continue such employment and enter into such Agreement;

          NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Company and Executive hereby agree as follows:

1. Employment.

(a) Agreement to Employ. Upon the terms and subject to the conditions of this Agreement, the Company hereby agrees to continue to employ Executive and Executive hereby agrees to continue his employment by the Company.

(b) Term of Employment. Except as otherwise provided below, the Company shall employ Executive for the period commencing on July 1, 1997 (the “Commencement Date”) and ending on the third anniversary of the Commencement Date. At the expiration of the original term or any extended term (each a “Renewal Date”), Executive’s employment hereunder shall be extended automatically, upon the same terms and conditions, for successive one-year periods, unless either party shall give written notice to the other of its intention not to renew such employment at least fifteen months prior to such Renewal Date. Without limiting the generality of the foregoing, upon the occurrence of a Change of Control (as defined below), the term of this Agreement shall be extended automatically without any action by either party until the third anniversary of such Change of Control. Notwithstanding the foregoing, if not previously terminated pursuant to Sections 1(b), 5(a) or 6(a), the term of this Agreement shall terminate on the last day of the month in which Executive attains age 65, and such a termination upon Executive reaching age 65 shall be deemed to be a Termination Due to Retirement for purposes of this Agreement. The period during which Executive is employed pursuant to this Agreement, including any extension thereof in accordance with this Section 1(b), shall be referred to as the “Employment Period.”

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2. Position and Duties.

During the Employment Period, Executive shall serve as Chairman, President and Chief Executive Officer of the Company, and/or in such other position or positions with the Company or its affiliates commensurate with his position and experience as the Board of Directors of the Company (the “Board”) shall from time to time specify. During the Employment Period, Executive shall have the duties, responsibilities and obligations customarily assigned to individuals serving in the position or positions in which Executive serves hereunder and such other duties, responsibilities and obligations as the Board shall from time to time specify. Executive shall devote his full time to the services required of him hereunder, except for vacation time and reasonable periods of absence due to sickness, personal injury or other disability, and shall use his best efforts, judgement, skill and energy to perform such services in a manner consonant with the duties of his position and to improve and advance the business and interests of the Company and its affiliates. During the Employment Period, Executive shall comply with the Code of Conduct of the Company. Unless and to the extent inconsistent with the terms of any published Company policy or code of conduct as in effect on the date hereof and as hereafter amended, nothing contained herein shall preclude Executive from (a) serving on the board of directors of any business corporation with the consent of the Board, (b) serving on the board of, or working for, any charitable or community organization, or (c) pursuing his personal financial and legal affairs, so long as the foregoing activities, individually or collectively, do not interfere with the performance of Executive’s duties hereunder or violate any of the provisions of Section 9 hereof.

3. Compensation.

(a) Base Salary. During the Employment Period, the Company shall pay Executive a base salary at the annual rate as in effect on the date hereof. The annual base salary payable under this paragraph shall be reduced, however, to the extent that Executive elects to defer such salary under the terms of any deferred compensation or savings plan or arrangement maintained or established by the Company or its affiliates. The Board or the appropriate committee of the Board may in its discretion periodically review Executive’s base salary in light of competitive practices, the base salaries paid to other executive officers of the Company and the performance of Executive and the Company and its applicable affiliates, and may, in its discretion, increase such base salary by an amount it determines to be appropriate. Any such increase shall not reduce or limit any other obligation of the Company hereunder. Executive’s base salary (as set forth above or as may be increased from time to time) shall not be reduced following any Change of Control, but may be reduced prior to a Change of Control solely pursuant to a cost-saving plan or structural realignment of total compensation elements that includes all senior executives and only to the extent that such reduction is proportionate to the reductions applicable to other senior executives. Executive’s annual base salary payable hereunder, as it may be increased or reduced from time to time as provided herein and without reduction for any amounts deferred as described above, shall be referred to herein as “Base Salary.” The Company shall pay Executive the portion of his Base Salary not deferred not less frequently than in equal monthly installments.

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(b) Annual Bonus. For each calendar year ending during the Employment Period, Executive shall have the opportunity to earn and receive an annual bonus, based on the achievement of target levels of performance, equal to the percentage of his Base Salary used to calculate such annual bonus as of the date hereof. Executive’s annual bonus opportunity may be increased above such percentage from time to time by the Board or the appropriate committee thereof. Executive’s annual bonus opportunity shall not be reduced following any Change of Control, but may be reduced prior to a Change of Control solely pursuant to a cost-saving plan or structural realignment of total compensation elements that includes all senior executives and only to the extent that such reduction is proportionate to the reductions applicable to other senior executives. Executive’s annual bonus opportunity, as it may be increased or reduced from time to time as provided herein, shall be referred to herein as “Target Bonus.” The actual bonus, if any, payable for any such year shall be determined in accordance with the terms of the Company’s Annual Executive Bonus Program or any successor annual incentive plan (the “Annual Plan”) based upon the performance of the Company and/or its applicable affiliates and/or Executive against target objectives established under such Annual Plan. Subject to Executive’s election to defer all or a portion of any annual bonus payable hereunder pursuant to the terms of any deferred compensation or savings plan or arrangement maintained or established by the Company or its affiliates, any annual bonus payable under this Section 3(b) shall be paid to Executive in accordance with the terms of the Annual Plan.

(c) Long-term Incentive Compensation. During the Employment Period, Executive shall participate in all of the Company’s existing and future long-term incentive compensation programs for key executives at a level commensurate with his position with the Company and consistent with the Company’s then current policies and practices, as determined in good faith by the Board or the appropriate committee of the Board.

4. Benefits, Perquisites and Expenses.

(a) Benefits. During the Employment Period, Executive (and, to the extent applicable, his dependents) shall be eligible to participate in or be covered under (i) each welfare benefit plan or program maintained or as hereafter amended or established by the Company or its applicable affiliates, including, without limitation, each group life, hospitalization, medical, dental, health, accident or disability insurance or similar plan or program of thereof, and (ii) each pension, retirement, savings, deferred compensation, stock purchase or other similar plan or program maintained or as hereafter amended or established by the Company or its applicable affiliates, in each case to the extent that Executive is eligible to participate in any such plan or program under the generally applicable provisions thereof. Nothing in this Section 4(a) shall limit the Company’s right to amend or terminate any such plan or program in accordance with the procedures set forth therein or as permitted by applicable law.

(b) Perquisites. For each calendar year during the Employment Period, Executive shall be entitled to at least the number of paid vacation days per year that Executive is entitled to as of the date

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hereof, and shall also be entitled to receive such other perquisites as are generally provided to him as of the date hereof or are hereafter provided to other similarly situated senior executives of the Company in accordance with the then current policies and practices of the Company.

(c) Business Expenses. During the Employment Period, the Company shall pay or reimburse Executive for all reasonable business expenses incurred or paid by Executive in the performance of Executive’s duties hereunder, upon presentation of expense statements or vouchers and such other information as the Company may require and in accordance with the generally applicable policies and procedures of the Company.

(d) Office and Support Staff. During the Employment Period, Executive shall be entitled to an office with furnishings and other material appointments, and to secretarial and other assistance, at a level that is at least commensurate with the foregoing provided to him as of the date hereof or is hereafter provided to other similarly situated senior executives of the Company.

(e) Indemnification. The Company shall indemnify Executive and hold Executive harmless from and against any claim, loss or cause of action, regardless whether asserted during or after the Employment Period, arising from or out of Executive’s performance as an officer, director or employee of the Company or any of its affiliates or in any other capacity, including any fiduciary capacity in which Executive serves at the request of the Company, to the maximum extent permitted by applicable law and under the Certificate of Incorporation and By-Laws of the

Company, as may be amended from time to time (the “Governing Documents”), provided that in no event shall the protection afforded to Executive be less than that afforded under the Governing Documents as in effect on the Commencement Date.

5. Termination of Employment.

The provisions of this Section 5 shall apply prior to the occurrence of a Change of Control and, if Executive is still in the Company’s employ, shall again become applicable upon the third anniversary of such Change of Control.

(a) Early Termination of the Employment Period. Notwithstanding Section 1(b) hereof, the Employment Period shall end upon the earliest to occur of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination, (iv) a Termination Due to Retirement, (v) a Termination Due to Disability, or (vi) a Termination Due to Death.

(b) Notice of Termination. Communication of termination under this Section 5 shall be made to the other party by Notice of Termination in the case of (i) a Termination For Cause, (ii) a Termination Without Cause, or (iii) a Voluntary Termination.

(c) Benefits Payable Upon Termination; Rules for Determining Reason for Termination.

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(i) Benefits Payable Upon Termination. Following the end of the Employment Period pursuant to Section 5(a), Executive (or, in the event of his death, his surviving spouse, if any, or if none, his estate) shall be paid the type or types of compensation determined to be payable in accordance with the following table, such payment to be made in the form specified in such table and at the time established pursuant to Section 7 hereof. Capitalized terms used in such table shall have the meanings set forth in Section 5(d) hereof.

(ii) Rules for Determining Reason for Termination.

(A) If a Voluntary Termination occurs on a date that Executive is eligible for Retirement as defined in The Hartford Investment and Savings Plan, as may be amended from time to time, or any successor plan thereof (the “Savings Plan”), such Voluntary Termination shall instead be treated as a Termination Due to Retirement solely for purposes of this Section 5.

(B) No Termination Without Cause shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 5, notwithstanding the fact that, either on, before or after the date of termination of the Employment Period with respect thereto, (I) Executive was eligible for Retirement as defined in the Savings Plan, (II) Executive requested to be treated as a retiree for purposes of the Savings Plan or any other plan or program of the Company or its affiliates, or (III) Executive or the Company could have terminated Executive’s employment in a Termination Due to Disability hereunder.

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BENEFITS PAYABLE : NON-CHANGE OF CONTROL

							Welfare
	Accrued	Pro Rata Target	Severance			Vested Benefits	Benefits
BENEFIT:	Salary	Bonus	Payment	Equity Awards	Vested Benefits	Enhancement	Continuation
FORM OF PAYMENT:	Lump Sum	Lump Sum	Lump Sum	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Lump Sum	Determined Under the Applicable Plan
Termination For Cause	Payable	Not Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Without Cause	Payable	Payable	Payable	Options /Restricted Stock: Payable Other Equity Awards: Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Due to Retirement	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Disability	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Death	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available

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(d) Definitions.

“Accrued Salary” means any Base Salary earned, but unpaid, for services rendered to the Company on or prior to the date on which the Employment Period ends pursuant to Section 5(a) (other than Base Salary deferred pursuant to Executive’s election, as contemplated by Section 3(a) hereof), plus any vacation pay accrued by Executive as of such date.

“Available” means that the particular benefit shall be made available to Executive to the extent specifically provided herein or required by applicable law.

“Determined Under the Applicable Plan” means that the determination of whether a particular benefit shall or shall not be paid to Executive, and, where specifically required by this Agreement, the timing or form of any benefit payment, shall be made solely by application of the terms of the plan or program providing such benefit, except to the extent that the terms of such plan or program are expressly superseded or modified by this Agreement.

“Equity Awards” means the outstanding stock option, restricted stock, performance share and other equity or long-term incentive compensation awards, if any, held by Executive as of the date of his termination.

“ERPs” means any excess retirement plans maintained or as hereafter amended or established by the Company or its applicable affiliates.

“ESPs” means any excess investment and savings plans maintained or as hereafter amended or established by the Company or its applicable affiliates.

“Lump Sum” means a single lump sum cash payment.

“Not Available” means that the particular benefit shall be not be made available to Executive, except to the extent required by applicable law.

“Notice of Termination” means (i) in the case of a Termination For Cause, a written notice given by the Company to Executive within 30 calendar days of the Company’s having actual knowledge of the events giving rise to such Termination For Cause, (ii) in the case of a Termination Without Cause, a written notice given by the Company to Executive at least 30 calendar days before the effective date of such Termination Without Cause, and (iii) in the case of a Voluntary Termination, a written notice given by Executive to the Company indicating the effective date of Executive’s termination of the Employment Period in such Voluntary Termination, such effective date to be no earlier than 30 days following the date such notice is received by the Company from Executive.

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“Not Payable” means (i) with respect to benefits other than Equity Awards, such benefits shall not be paid or otherwise provided to Executive, and (ii) with respect to Equity Awards, such Equity Awards, to the extent unvested, unexercisable, or subject to restrictions that have not yet lapsed, shall be forfeited and/or canceled as of the date of termination of the Employment Period, unless otherwise determined by the Board or the appropriate committee of the Board in its discretion.

“Payable” means (i) with respect to benefits other than those described in clause (ii) of this paragraph, such benefits shall be paid to Executive in the amount, at the time, and in the form specified herein, and (ii) with respect to benefits described in this clause (ii), the following shall apply solely in the event of a Termination Without Cause, notwithstanding anything in the applicable plan or program to the contrary: (A) with respect to any outstanding stock options not yet expired as of the date of termination of the Employment Period, Executive shall be treated as though he remained in the employ of the Company for the two year period following such date, and except to the extent that any such options first expire during such period under the applicable plan or program, (I) any such options that would have become vested over such two year period solely by reason of Executive remaining in the employ of the Company during such period shall become immediately vested and nonforfeitable, (II) with respect to any options that by their terms would vest if the stock of the Company or an affiliate were to reach a specified market price, such options shall become vested and nonforfeitable if and when such stock reaches such price during such two year period, and (III) Executive shall have an additional two years to exercise any vested options (beyond the time to exercise such options permitted under the applicable plan or program), and (B) with respect to any restricted stock subject to restrictions that have not yet lapsed as of the date of termination of the Employment Period, such restrictions shall be deemed to have lapsed and such restricted stock shall become immediately vested and nonforfeitable as of such date.

“Pro-Rata Target Bonus” means an amount equal to the product of: (i) an amount equal to the Target Bonus Executive would have been entitled to receive under Section 3(b) for the calendar year in which the Employment Period terminates, and (ii) a fraction (the “Service Fraction”), the numerator of which is equal to the number of rounded months in such calendar year which have elapsed as of the date of such termination, and the denominator of which is 12; provided that, if the Employment Period terminates in the last quarter of any calendar year, the Pro-Rata Target Bonus shall be the amount determined under the above formula or, if greater, the product of: (A) the bonus that would have been paid to Executive based on actual performance for such calendar year, and (B) the Service Fraction.

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“Severance Payment” means an amount equal to two times the sum of: (i) Executive’s Base Salary, and (ii) Executive’s Target Bonus amount under Section 3(b) hereof for the calendar year in which the Employment Period terminates.

“Termination Due to Death” means a termination of Executive’s employment due to the death of Executive.

“Termination Due to Disability” means (i) a termination of Executive’s employment by the Company as a result of a determination by the Board or the appropriate committee thereof that Executive has been incapable of substantially fulfilling the positions, duties, responsibilities and obligations set forth in this Agreement on account of physical, mental or emotional incapacity resulting from injury, sickness or disease for a period of (A) at least four consecutive months, or (B) more than six months in any twelve month period, or (ii) Executive’s termination of employment on account of Disability as defined in The Hartford Investment and Savings Plan, as may be amended from time to time.

“Termination Due to Retirement” means Executive’s termination of employment on account of Executive’s Retirement as defined in The Hartford Investment and Savings Plan, as may be amended from time to time.

“Termination For Cause” means a termination of Executive’s employment by the Company for any of the following reasons: (i) Executive is convicted of or enters a plea of guilty or nolo contendere to a felony, a crime of moral turpitude, dishonesty, breach of trust or unethical business conduct, or any crime involving the business of the Company or its affiliates; (ii) in the performance of his duties hereunder or otherwise to the detriment of the Company or its affiliates, Executive engages in (A) willful misconduct, (B) willful or gross neglect, (C) fraud, (D) misappropriation, (E) embezzlement, or (F) theft; (iii) Executive willfully fails to adhere to the policies and practices of the Company or devote substantially all of his business time and effort to the affairs thereof, or disobeys the directions of the Board to do either of the foregoing; (iv) Executive breaches this Agreement in any material respect; (v) Executive is adjudicated in any civil suit to have committed, or acknowledges in writing or in any agreement or stipulation his commission, of any theft, embezzlement, fraud or other intentional act of dishonesty involving any other person; or (vi) Executive violates the Code of Conduct of the Company. Executive shall be permitted to respond and defend himself before the Board within 30 days after delivery to Executive of written notification of any proposed Termination For Cause that specifies in detail the reasons for such termination. If the majority of the members of the Board (excluding Executive) do not confirm that the Company had grounds for a Termination For Cause within 30 days after Executive has had his hearing before the Board, Executive shall have the option of treating his employment as not

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having terminated or as having been terminated in a Termination Without Cause.

“Termination Without Cause” means any involuntary termination of Executive’s employment by the Company other than a Termination For Cause, a Termination Due to Disability or a Termination Due to Death.

“Vested Benefits” means amounts that are vested or that Executive is otherwise entitled to receive, without the performance by Executive of further services or the resolution of a contingency, under the terms of or in accordance with any investment and savings plan or retirement plan of the Company or its affiliates, and any ERPs or ESPs related thereto, and any deferred compensation or employee stock purchase plan or similar plan or program of the Company or its affiliates.

“Vested Benefits Enhancement” means (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable Federal rate as determined under Section 1274(d) of the Internal Revenue Code of 1986, as amended (the “Code”), of the additional retirement benefits that would have been payable or available to Executive under any ERPs, based on (A) the age and service Executive would have attained or completed had Executive continued in the Company’s employ until the second anniversary of the date of termination of the Employment Period, and (B) where compensation is a relevant factor, his pensionable compensation as of such date, such compensation to include, on the same terms as apply to other executives, any Severance Payment made to Executive, and (ii) solely for purposes vesting in any benefits under any ESPs, Executive shall be treated as having continued in the Company’s employ until the second anniversary of the date of termination of the Employment Period.

“Voluntary Termination” means any voluntary termination of Executive’s Employment by Executive pursuant to this Section 5, other than a Termination Due to Retirement or a Termination Due to Disability by Executive.

“Welfare Benefits Continuation” means that until the second anniversary of the date of termination of the Employment Period, Executive and, if applicable, his dependents shall be entitled to continue participation in the life and health insurance benefit plans of the Company or its affiliates in which Executive and/or such dependents were participating as of the date of termination of the Employment Period, and such other welfare benefit plans thereof in which the Company is required by law to permit the participation of Executive and/or his dependents, (collectively, the “Welfare Benefit Plans”). Such participation shall be on the same terms and conditions (including the requirement that Executive pay any premiums generally paid by an employee) as would apply if Executive were still in the employ of the Company;

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provided that the continued participation of Executive and/or his dependents in such Welfare Benefit Plans shall cease on such earlier date as Executive may become eligible for comparable welfare benefits provided by a subsequent employer. To the extent that Welfare Benefits Continuation cannot be provided under the terms of the applicable plan, policy or program, the Company shall provide a comparable benefit under another plan or from the Company’s general assets.

6. Termination Following a Change of Control or Potential Change of Control.

This Section 6 shall apply (instead of Section 5) during the period commencing upon a Change of Control and continuing until the third anniversary thereof; provided that, in the event that Executive’s employment is terminated by the Company in a Termination Without Cause after the occurrence of a Potential Change of Control and a Change of Control occurs within one year following the date of such termination, then solely for purposes of this Agreement, Executive shall be deemed to have remained in the Company’s employ until the occurrence of the Change of Control and thereafter to have then been terminated by the Company in a Termination Without Cause. As a result, Executive shall be entitled to receive the excess of (i) the benefits payable in the event of a Termination Without Cause under this Section 6, over (ii) the amount of any benefits payable to Executive under Section 5.

(a) Early Termination of the Employment Period. Notwithstanding Section 1(b) hereof, the Employment Period shall end upon the earliest to occur of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination Within 180 Days, (iv) a Voluntary Termination After 180 Days, (v) a Termination For Good Reason, (vi) a Termination Due to Retirement, (vii) a Termination Due to Disability, or (viii) a Termination Due to Death.

(b) Notice of Termination. Communication of termination under this Section 6 shall be made to the other party by Notice of Termination in the case of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination Within 180 Days, (iv) a Voluntary Termination After 180 Days, or (v) a Termination For Good Reason.

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(c) Benefits Payable Upon Termination; Rules for Determining Reason for Termination.

(i) Benefits Payable Upon Termination. Following the end of the Employment Period, Executive (or, in the event of his death, his surviving spouse, if any, or if none, his estate) shall be paid the type or types of compensation determined to be payable in accordance with the following table, such payment to be made in the form specified in such table and at the time established pursuant to Section 7 hereof. Capitalized terms used in such table (and otherwise in this Section 6) that are defined in Section 5, and not specifically defined in Section 6(d) hereof, shall have the meanings ascribed thereto under Section 5. Where such a capitalized term is defined solely in Section 6(d), or in both Section 5 and Section 6(d), such term shall have the meaning ascribed to it in Section 6(d).

(ii) Rules for Determining Reason for Termination.

(A) No Termination Without Cause, Voluntary Termination Within 180 Days or Termination For Good Reason shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 6, notwithstanding the fact that, either on, before or after the Date of Termination with respect thereto, (I) Executive was eligible for Retirement as defined in the Savings Plan, (II) Executive requested to be treated as a retiree for purposes of the Savings Plan or any other plan or program of the Company or its affiliates, or (III) Executive or the Company could have terminated Executive’s employment in a Termination Due to Disability hereunder.

(B) No Termination Due to Retirement shall be treated as a Voluntary Termination After 180 Days for purposes of this Section 6, notwithstanding the fact that the Date of Termination for such Termination Due to Retirement may occur within 180 days following a Change of Control.

(C) Notwithstanding any provision in this Agreement to the contrary, in the event of a Change of Control as described in clause (iii) or clause (iv) of the definition of the term change of Control in Section 6(d) of this Agreement, if the employment of Executive involuntarily terminates on or after the date of a shareholder approval described in either of such clauses but before the date of a consummation described in either of such clauses, the date of termination of Executive’s employment shall be deemed for purposes of this Agreement to be the day following the date of the applicable consummation.

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BENEFITS PAYABLE: CHANGE OF CONTROL

	Accrued	Pro Rata Target	Severance			Vested Benefits	Welfare
BENEFIT	Salary	Bonus	Payment	Equity Awards	Vested Benefits	Enhancement	Benefits Continuation
FORM OF PAYMENT	Lump Sum	Lump Sum	Lump Sum	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Lump Sum	Determined Under the Applicable Plan
Termination For Cause	Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Without Cause	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination Within 180 Days	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination After 180 Days	Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination For Good Reason	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Termination Due to Retirement	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Disability	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Death	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available

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(d) Definitions.

“Beneficial Owner” means any Person who, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” (within the meaning of Rule 13d-3 under the Securities and Exchange Act of 1934, as amended (the “Act”)) of any securities of a company, including any such right pursuant to any agreement, arrangement or understanding (whether or not in writing), provided that: (i) a Person shall not be deemed the Beneficial Owner of any security as a result of an agreement, arrangement or understanding to vote such security (A) arising solely from a revocable proxy or consent given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the Exchange Act and the applicable rules and regulations thereunder, or (B) made in connection with, or to otherwise participate in, a proxy or consent solicitation made, or to be made, pursuant to, and in accordance with, the applicable provisions of the Exchange Act and the applicable rules and regulations thereunder, in either case described in clause (A) or (B) above, whether or not such agreement, arrangement or understanding is also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); and (ii) a Person engaged in business as an underwriter of securities shall not be deemed to be the Beneficial Owner of any security acquired through such Person’s participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition.

“Change of Control” means:

(i) a report on Schedule 13D shall be filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Act disclosing that any Person other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company is the Beneficial Owner of twenty percent or more of the outstanding stock of the Company entitled to vote in the election of directors of the Company;

(ii) any Person, other than the Company or a subsidiary of the Company or a subsidiary of the Company shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) entitled to vote in the election of directors of the Company for cash, securities or any other consideration, provided that after consummation of the offer, the Person in question is the Beneficial Owner of fifteen percent or more of the outstanding stock of the Company entitled to vote in the election of directors of the Company (calculated as provided in paragraph (d) of Rule 13d-3 under the Act in the case of rights to acquire stock);

(iii) any merger, consolidation, recapitalization or reorganization of the Company approved by the stockholders of the Company shall be consummated, other than any such transaction immediately following which the persons who were the Beneficial Owners of the outstanding securities of the Company entitled to vote in the election of directors of the Company

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immediately prior to such transaction are the Beneficial Owners of at least 55% of the total voting power represented by the securities of the entity surviving such transaction entitled to vote in the election of directors of such entity (or the ultimate parent of such entity) in substantially the same relative proportions as their ownership of the securities of the Company entitled to vote in the election of directors of the Company immediately prior to such transaction; provided that, such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such threshold (or to preserve such relative voting power) is due solely to the acquisition of voting securities by an employee benefit plan of the Company, such surviving entity or any subsidiary of such surviving entity;

(iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company approved by the stockholders of the Company shall be consummated; or

(v) within any 24 month period, the persons who were directors of the Company immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to the Company, provided that any director who was not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director (A) was elected to the Board by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually or by prior operation of this clause (v), and (B) was not designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (iii) or (iv) of this definition of the term Change of Control in Section 6(d) of this Agreement.

“Date of Termination” means (i) in the case of a termination of the Employment Period for which a Notice of Termination is required, the date of receipt of such Notice of Termination or, if later, the date specified therein, as the case may be, or (ii) in all other cases, the actual date on which Executive’s employment terminates during the Employment Period.

“Not Payable” means that a particular benefit shall not be paid or otherwise provided to Executive.

“Notice of Termination” means (i) in the case of a Termination For Cause, a written notice given by the Company to Executive, within 30 calendar days of the Company’s having actual knowledge of the events giving rise to such termination, (ii) in the case of a Termination Without Cause, a written notice given by the Company to Executive at least 30 calendar days before the effective date of such Termination Without Cause, (iii) in the case of a Voluntary Termination Within 180 Days or a Voluntary Termination After 180 Days, a written notice given by Executive to the Company at least 30 calendar days before the effective date of such termination, and (iv) in the

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case of a Termination For Good Reason, a written notice given by Executive to the Company within 180 days of Executive’s having actual knowledge of the events giving rise to such Termination For Good Reason, and which (A) indicates the specific termination provision in this Agreement relied upon, (B) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (C) if the termination date is other than the date of receipt of such notice, specifies the termination date of this Agreement (which date shall be not more than 15 days after the giving of such notice). The failure by Executive to set forth in such Notice of Termination any fact or circumstance that contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his rights hereunder.

“Payable” means that a particular benefit shall be paid to Executive in the amount, at the time, and in the form specified herein.

“Person” has the meaning ascribed to such term in Section 3(a)(9) of the Act, as supplemented by Section 13(d)(3) of the Act; provided, however, that Person shall not include (i) the Company, any subsidiary of the Company or any other Person controlled by the Company, (ii) any trustee or other fiduciary holding securities under any employee benefit plan of the Company or of any subsidiary of the Company, or (iii) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of securities of the Company.

“Potential Change of Control” means:

(i) a Person shall commence a tender offer, which if successfully consummated, would result in such Person being the Beneficial Owner of at least 15% of the stock of the Company entitled to vote in the election of directors of the Company;

(ii) the Company shall enter into an agreement the consummation of which shall constitute a Change of Control of the Company;

(iii) solicitation of proxies for the election of directors of the Company by anyone other than the Company, which, if such directors were elected, would result in the occurrence of a Change of Control described in Section 6(d) of this Agreement; or

(iv) any other event shall occur which is deemed to be a Potential Change of Control by the Board or the appropriate Committee thereof.

“Severance Payment” means a cash amount equal to three times the sum of (i) Executive’s Base Salary at the rate in effect as of the date on which the Employment Period terminates, and (ii) Executive’s Target Bonus for such year.

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“Termination For Cause” means the Company’s termination of Executive’s employment due to (i) Executive’s conviction of a felony; (ii) an act or acts of extreme dishonesty or gross misconduct on Executive’s part which result or are intended to result in material damage to the Company’s business or reputation; or (iii) repeated material violations by Executive of his obligations under Section 2 of this Agreement, which violations are demonstrably willful and deliberate on Executive’s part and which result in material damage to the Company’s business or reputation. Executive shall be permitted to respond and defend himself before the Board within 30 days after delivery to Executive of written notification of any proposed Termination for Cause which specifies in detail the reasons for such termination. If the majority of the members of the Board (excluding Executive) do not confirm that the Company had grounds for a Termination For Cause within 30 days after Executive has had his hearing before the Board, Executive shall have the option of treating his employment as not having terminated or as having been terminated pursuant to a Termination Without Cause.

“Termination For Good Reason” means the occurrence of any of the following after the occurrence of a Potential Change of Control or a Change of Control:

(i) (A) the assignment to Executive of any duties inconsistent in any material adverse respect with Executive’s position, duties, authority or responsibilities as contemplated by Section 2 of this Agreement, or (B) any other material adverse change in such position, including titles, authority or responsibilities;

(ii) any failure by the Company to comply with any of the provisions of Sections 3 and 4 of this Agreement at a level of least equal to that in effect immediately preceding the Change of Control or a Potential Change of Control, other than an insubstantial or inadvertent failure remedied by the Company promptly after receipt of notice thereof given by Executive;

(iii) the Company’s requiring Executive to be based at any office or location more than 25 miles from the location at which he performed his services specified under Section 2 hereof immediately prior to the Change of Control or a Potential Change of Control, except for travel reasonably required in the performance of Executive’s responsibilities;

(iv) any failure by the Company to obtain the assumption and agreement to perform this Agreement by a successor as contemplated by Section 10(d) hereof; or

(v) any attempt by the Company to terminate the Executive’s employment in a Termination For Cause that is determined by the Board pursuant to Section 5(c) hereof, or in a proceeding pursuant to Section 9 or Section 10 hereof, not to constitute a Termination For Cause.

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Notwithstanding the foregoing, a termination of Executive’s employment shall not be treated as a Termination For Good Reason (I) if Executive shall have consented in writing to the occurrence of the event giving rise to the claim of Termination For Good Reason, or (II) if Executive shall have delivered a Notice of Termination to the Company, and the facts and circumstances specified therein as providing a basis for such Termination For Good Reason are cured by the Company within 10 days of its receipt of such Notice of Termination.

“Vested Benefits Enhancement” means (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable Federal rate as determined under Section 1274(d) of the Internal Revenue Code of 1986, as amended (the “Code”), of the additional retirement benefits that would have been payable or available to Executive under any ERPs, based on (A) the age and service Executive would have attained or completed had Executive continued in the Company’s employ until the third anniversary of the occurrence of the Change of Control, and (B) where compensation is a relevant factor, his pensionable compensation as of the Date of Termination, such compensation to include, on the same terms as apply to other executives, any Severance Payment made to Executive, (ii) solely for purposes of vesting in any benefits under any ESPs, Executive shall be treated as having continued in the Company’s employ until the third anniversary of the occurrence of such Change of Control, and (iii) solely for the purposes of determining eligibility for retiree medical benefits under any retirement plan or any retiree welfare benefit plan, policy or program of the Company or its affiliates, and any ERPs related thereto, Executive shall be treated as having continued in the Company’s employ until the third anniversary of the occurrence of such Change of Control and to have retired on the last day of such period.

“Voluntary Termination Within 180 Days” means a termination of employment by Executive for any reason within the first 180 days following a Change of Control, and “Voluntary Termination After 180 Days” means a termination of employment by Executive other than a Termination For Good Reason, a Termination Due to Disability by Executive, or a Termination Due to Death within the remaining 2 years and 6 months following a Change of Control.

“Welfare Benefits Continuation” shall have the same meaning as that described in Section 5 hereof, except that the entitlement of Executive and/or his dependents to participation in the Welfare Benefit Plans shall continue until the third anniversary of the Date of Termination.

(d) Out-Placement Services. If the Employment Period terminates because of a Termination Without Cause or a Termination For Good Reason, Executive shall be entitled to out-placement services, provided by the Company or its designee at the Company’s expense, for 12 months following the Date of Termination, or such lesser period as the Executive may require such services.

(e) Certain Further Payments by Company.

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(i) Tax Reimbursement Payment. In the event that any amount or benefit paid or distributed to Executive pursuant to this Agreement, taken together with any amounts or benefits otherwise paid or distributed to Executive by the Company or any affiliate (collectively, the “Covered Payments”), are or become subject to the tax (the “Excise Tax”) imposed under Section 4999 of the Internal Revenue Code of 1986, as amended, or any similar tax that may hereafter be imposed, the Company shall pay to the Executive at the time specified in this Section an additional amount (the “Tax Reimbursement Payment”) such that the net amount retained by the Executive with respect to such Covered Payments, after deduction of any Excise Tax on the Covered Payments and any Federal, state and local income tax and other tax on the Tax Reimbursement Payment provided for by this Section, but before deduction for any Federal, state or local income or employment tax withholding on such Covered Payments, shall be equal to the amount of the Covered Payments.

(ii) Applicable Rules. For purposes of determining whether any of the Covered Payments will be subject to the Excise Tax and the amount of such Excise Tax,

(A) such Covered Payments will be treated as “parachute payments” within the meaning of Section 280G of the Code, and all “parachute payments” in excess of the “base amount” (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the good faith judgment of the Company’s independent certified public accountants appointed prior to the Effective Date or tax counsel selected by such accountants (the “Accountants”), the Company has a reasonable basis to conclude that such Covered Payments (in whole or in part) either do not constitute “parachute payments” or represent reasonable compensation for personal services actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the “base amount,” or such “parachute payments” are otherwise not subject to such Excise Tax, and

(B) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Accountants in accordance with the principles of Section 280G of the Code.

(iii) Additional Rules. For purposes of determining the amount of the Tax Reimbursement Payment, the Executive shall be deemed to pay: (A) Federal income taxes at the highest applicable marginal rate of Federal income taxation for the calendar year in which the Tax Reimbursement Payment is to be made, and (B) any applicable state and local income and other taxes at the highest applicable marginal rate of taxation for the calendar year in which the Tax Reimbursement Payment is to be made, net of the maximum reduction in Federal incomes taxes which could be obtained from the deduction of such state or local taxes if paid in such year.

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(iv) Repayment or Additional Payment in Certain Circumstances.

(A) Repayment. In the event that the Excise Tax is subsequently determined by the Accountants or pursuant to any proceeding or negotiations with the Internal Revenue Service to be less than the amount taken into account hereunder in calculating the Tax Reimbursement Payment made, Executive shall repay to the Company, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior Tax Reimbursement Payment that would not have been paid if such lesser Excise Tax had been applied in initially calculating such Tax Reimbursement Payment. Notwithstanding the foregoing, in the event any portion of the Tax Reimbursement Payment to be repaid to the Company has been paid to any Federal, state or local tax authority, repayment thereof shall not be required until actual refund or credit of such portion has been made to Executive by the applicable tax authority. Executive and the Company shall mutually agree upon the course of action to be pursued (and the method of allocating the expenses thereof) if Executive’s good faith claim for refund or credit is denied.

(B) Additional Tax Reimbursement Payment. In the event that the Excise Tax is later determined by the Accountants or pursuant to any proceeding or negotiations with the Internal Revenue Service to exceed the amount taken into account hereunder at the time the Tax Reimbursement Payment is made (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of the Tax Reimbursement Payment), the Company shall make an additional Tax Reimbursement Payment in respect of such excess (plus any interest or penalty payable with respect to such excess) at the time that the amount of such excess is finally determined.

(v) Timing for Tax Reimbursement Payment. The Tax Reimbursement Payment (or portion thereof) provided for in this Section 6 shall be paid to Executive not later than 10 business days following the payment of the Covered Payments; provided, however, that if the amount of such Tax Reimbursement Payment (or portion thereof) cannot be finally determined on or before the date on which payment is due, the Company shall pay to Executive by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than 45 calendar days after payment of the related Covered Payment. To the extent that the amount of the estimated Tax Reimbursement Payment exceeds the amount subsequently determined to have been due, Executive shall repay such excess to the Company on the fifth business day after written demand by the Company for payment.

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7. Timing of Payments.

Accrued Salary, Severance Payments and Vested Benefits Enhancements shall be paid no later than 10 days following the termination of the Employment Period. Pro-Rata Target Bonus shall be paid as follows: (a) if the Employment Period terminates in the first, second or third calendar quarter of any particular calendar year, then the Pro-Rata Target Bonus shall be paid no later than 10 days following the termination of the Employment Period; or (b) if the Employment Period terminates in the fourth calendar quarter of any particular calendar year, then the Pro-Rata Target Bonus shall be paid no later than the same time as similar awards are paid to other executives participating in the plans or programs under which the awards are paid, but in no event later than March 31 of the calendar year following the end of the such fourth calendar quarter. Vested Benefits and Equity Awards shall be paid no later than the time for payment Determined Under the Applicable Plan except as otherwise expressly superseded or modified by this Agreement. Tax Reimbursement Payments shall be paid at the time specified in Section 6 hereof. Notwithstanding the foregoing, solely for purposes of amounts payable pursuant to Section 5 hereof, if any amount payable to Executive pursuant to Section 5 would be nondeductible by the Company under Section 162(m) of the Code if paid in the year of Executive’s termination, the Company shall have the option of paying such nondeductible amount, with interest at the one-year treasury bill rate as in effect on the date of such termination as reported in the Wall Street Journal, on the first day of the second calendar quarter in the year following such termination.

8. Full Discharge of Company Obligations.

Except in the case of amounts payable to Executive in the event of a termination of employment following a Potential Change of Control as described in the first paragraph of Section 6, and except as expressly provided in the last sentence of this Section 8, the amounts payable to Executive pursuant to Section 5 following termination of his employment (including amounts payable with respect to Vested Benefits) shall be in full and complete satisfaction of Executive’s rights under Section 5 of this Agreement and any other claims he may have in respect of his employment by the Company or any of its affiliates. Such amounts shall constitute liquidated damages with respect to any and all such rights and claims and, upon Executive’s receipt of such amounts, the Company shall be released and discharged from any and all liability to Executive in connection with Section 5 of this Agreement or otherwise in connection with Executive’s employment with the Company and its affiliates. Nothing in this Section 8 shall be construed to release the Company from its obligation to indemnify Executive as provided in Section 4(e) hereof.

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9. Noncompetition, Confidentiality and Other Covenants.

By and in consideration of the compensation and benefits to be provided by the Company hereunder, including the severance arrangements set forth herein, Executive agrees to the following:

(a) Noncompetition. During the Employment Period and until the earlier of: (i) the last day of the one year period following any Voluntary Termination of the Employment Period by Executive pursuant to Section 5 hereof, or (ii) the date a Change of Control occurs (the “Restriction Period”), Executive shall not become associated with any entity, whether as a principal, partner, employee, agent, consultant, shareholder (other than as a holder, or a member of a group which is a holder, of not in excess of 1% of the outstanding voting shares of any publicly traded company) or in any other relationship or capacity, paid or unpaid, that is actively engaged in any geographic area in any business which is in competition with the business of the Company. Notwithstanding anything herein to the contrary, the terms of this Section 9(a) shall not apply in the event of any termination of employment following a Change of Control as provided for in Section 6 of this Agreement, including any termination following a potential Change of Control as described in the first paragraph of Section 6.

(b) Confidentiality. Without the prior written consent of the Company, except to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency, Executive shall not disclose to any third person, or permit the use of for the benefit of any person or any entity other than The Company or its affiliates, any trade secrets, customer lists, information regarding product development, marketing plans, sales plans, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, financial records, or other financial, organizational, commercial, business, sales, marketing, technical, product or employee information relating to the Company or its affiliates or information designated as confidential, proprietary, and/or a trade secret, or any other information relating to the Company or its affiliates that Executive knows from the circumstances, in good faith and good conscience, should be treated as confidential, or any information that the Company or its affiliates may receive belonging to customers, agents or others who do business with the Company or its affiliates, except to the extent that any such information previously has been disclosed to the public by the Company or is in the public domain (other than by reason of Executive’s violation of this Section 9(b)).

(c) Non-Solicitation of Employees. During the Employment Period and until the earlier of : (i) the last day of the one year period following any Voluntary Termination of the Employment Period by Executive pursuant to Section 5 hereof, or (ii) the date of a Change of Control occurs, Executive shall not directly or indirectly solicit, encourage or induce any employee of the Company or its affiliates to terminate employment with such entity, and shall not directly or indirectly, either individually

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or as owner, agent, employee, consultant or otherwise, employ or offer employment to any person who is or was employed by the Company or an affiliate thereof unless such person shall have ceased to be employed by such entity for a period of at least six months. Notwithstanding anything herein to the contrary, the terms of this Section 9(c) shall not apply in the event of any termination of employment following a Change of Control as provided for in Section 6 of this Agreement, including any termination following a potential Change of Control as described in the first paragraph of Section 6.

(d) Company Property. Except as expressly provided herein, promptly following any termination of the Employment Period, Executive shall return to the Company all property of the Company, and all copies thereof in Executive’s possession or under his control.

(e) Injunctive Relief and Other Remedies with Respect to Covenants. Executive acknowledges and agrees that the covenants and obligations of Executive with respect to noncompetition, confidentiality, nonsolicitation, and Company property relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, Executive agrees that the Company (i) shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) restraining Executive from committing any violation of the covenants and obligations contained in this Section 9, and (ii) shall have no further obligation to make any payments to Executive hereunder following any material violation of the covenants and obligations contained in this Section 9. These remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity. In connection with the foregoing provisions of this Section 9, Executive represents that his economic means and circumstances are such that such provisions will not prevent him from providing for himself and his family on a basis satisfactory to him. Notwithstanding the foregoing, in no event shall an asserted violation of the provisions of this Section constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement following a Change of Control.

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10. Miscellaneous.

(a) Survival. All of the provisions of Sections 5 (relating to termination of the Employment Period prior to a Change of Control), 6 (relating to termination of the Employment Period following a Change of Control or a Potential Change of Control), 9 (relating to noncompetition, confidentiality, nonsolicitation and Company property), 10(b) (relating to arbitration), 10(c) (relating to legal fees) and 10(n) (relating to governing law) of this Agreement shall survive the termination of this Agreement.

(b) Arbitration. Except as provided in Section 9, any dispute or controversy arising under or in connection with this Agreement shall be resolved by binding arbitration. Such arbitration shall be held in the city of Hartford, Connecticut and except to the extent inconsistent with this Agreement, shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect at the time of the arbitration, and otherwise in accordance with the principles that would be applied by a court of law or equity. The arbitrator shall be acceptable to both the Company and Executive. If the parties cannot agree on an acceptable arbitrator, the dispute or controversy shall be heard by a panel of three arbitrators; one appointed by each of the parties and the third appointed by the other two arbitrators. The Company and Executive further agree that they will abide by and perform any award or awards rendered by the arbitrators and that a judgment may be entered on any award or awards rendered by any state or federal court having jurisdiction over the Company or Executive or any of their respective property.

(c) Legal Fees and Expenses. In any contest (whether initiated by Executive or by the Company) as to the validity, enforceability or interpretation of any provision of this Agreement, the Company shall pay Executive’s legal expenses (or cause such expenses to be paid) including, without limitation, his reasonable attorney’s fees, on a quarterly basis, upon presentation of proof of such expenses in a form acceptable to the Company, provided that Executive shall reimburse the Company for such amounts, plus simple interest thereon at the 90-day United States Treasury Bill rate as in effect from time to time, compounded annually, if Executive shall not prevail, in whole or in part, as to any material issue as to the validity, enforceability or interpretation of any provision of this Agreement.

(d) Successors; Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Company and its successors. The Company shall require any successor to all or substantially all of the business and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform the Agreement if no such succession had taken place. This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by

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Executive otherwise than by will or the law of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

(e) Assignment. Except as provided in Section 10(d), neither this Agreement nor any of the rights or obligations hereunder shall be assigned or delegated by any party hereto without the prior written consent of the other party.

(f) Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the matters referred to herein. This Agreement supersedes and replaces any prior employment or severance agreement or arrangement between the Company and Executive. No other agreement relating to the terms of Executive’s employment by the Company, oral or otherwise, shall be binding between the parties unless it is in writing and signed by the party against whom enforcement is sought. There are no promises, representations, inducements or statements between the parties other than those that are expressly contained herein. Executive acknowledges that he is entering into this Agreement of his own free will and accord, and with no duress, and that he has read this Agreement and that he understands it and its legal consequences.

(g) Severability; Reformation. In the event that one or more of the provisions of this Agreement shall become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. In the event of a determination that any of the provisions of Section 9(a), Section 9(b) or Section 9(c) are not enforceable in accordance with their terms, Executive and the Company agree that such Section shall be reformed to make such Section enforceable in a manner that provides the Company the maximum rights permitted at law.

(h) Waiver. Waiver by any party hereto of any breach or default by the other party of any of the terms of this Agreement shall not operate as a waiver of any other breach or default, whether similar to or different from the breach or default waived. No waiver of any provision of this Agreement shall be implied from any course of dealing between the parties hereto or from any failure by either party hereto to assert its or his rights hereunder on any occasion or series of occasions.

(i) Notices. Any notice required or desired to be delivered under this Agreement shall be in writing and shall be delivered personally, by courier service, by registered mail, return receipt requested, or by telecopy and shall be effective upon actual receipt by the party to which such notice shall be directed, and shall be addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):

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If to the Company:	The Hartford Financial Services Group, Inc.
	Law Department, HO-1-09
	Hartford Plaza
	Hartford, CT 06115
	Attention: Corporate Secretary
with a copy to :	Debevoise & Plimpton
	875 Third Avenue
	New York, NY 10022
	Attn: Lawrence K. Cagney, Esq.
If to Executive:	The home address of Executive shown on the records of the Company

(j) Amendments. This Agreement may not be altered, modified or amended except by a written instrument signed by each of the parties hereto.

(k) Headings. Headings to provisions of this Agreement are for the convenience of the parties only and are not intended to be part of or to affect the meaning or interpretation hereof.

(l) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(m) Withholding. Any payments provided for herein shall be reduced by any amounts required to be withheld by the Company from time to time under applicable Federal, State or local income or employment tax laws or similar statutes or other provisions of law then in effect.

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(n) Governing Law. This Agreement shall be governed by the laws of the State of Connecticut, without reference to principles of conflicts or choice of law under which the law of any other jurisdiction would apply.

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EX-10.02

Exhibit 10.02

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT, dated as of July 1, 1997, by and between The Hartford Financial Services Group, Inc., a Delaware corporation (the “Company”), and David K. Zwiener (“Executive”).

W I T N E S S E T H:

          WHEREAS, the Company wishes to recognize the substantial services that Executive has provided to the Company; and

          WHEREAS, the Company desires that Executive continue to perform such services and to enter into an agreement embodying the terms of such employment (the “Agreement”); and

          WHEREAS, Executive desires to continue such employment and enter into such Agreement;

          NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Company and Executive hereby agree as follows:

1. Employment.

(a) Agreement to Employ. Upon the terms and subject to the conditions of this Agreement, the Company hereby agrees to continue to employ Executive and Executive hereby agrees to continue his employment by the Company.

(b) Term of Employment. Except as otherwise provided below, the Company shall employ Executive for the period commencing on July 1, 1997 (the “Commencement Date”) and ending on the third anniversary of the Commencement Date. At the expiration of the original term or any extended term (each a “Renewal Date”), Executive’s employment hereunder shall be extended automatically, upon the same terms and conditions, for successive one-year periods, unless either party shall give written notice to the other of its intention not to renew such employment at least fifteen months prior to such Renewal Date. Without limiting the generality of the foregoing, upon the occurrence of a Change of Control (as defined below), the term of this Agreement shall be extended automatically without any action by either party until the third anniversary of such Change of Control. Notwithstanding the foregoing, if not previously terminated pursuant to Sections 1(b), 5(a) or 6(a), the term of this Agreement shall terminate on the last day of the month in which Executive attains age 65, and such a termination upon Executive reaching age 65 shall be deemed to be a Termination Due to Retirement for purposes of this Agreement. The period during which Executive is employed pursuant to this Agreement, including any extension thereof in accordance with this Section 1(b), shall be referred to as the “Employment Period.”

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2. Position and Duties.

During the Employment Period, Executive shall serve as Executive Vice President and Chief Financial Officer of the Company, and/or in such other position or positions with the Company or its affiliates commensurate with his position and experience as the Board of Directors of the Company (the “Board”) or the Chairman of the Company (the “Chairman”) shall from time to time specify. During the Employment Period, Executive shall have the duties, responsibilities and obligations customarily assigned to individuals serving in the position or positions in which Executive serves hereunder and such other duties, responsibilities and obligations as the Board or the Chairman shall from time to time specify. Executive shall devote his full time to the services required of him hereunder, except for vacation time and reasonable periods of absence due to sickness, personal injury or other disability, and shall use his best efforts, judgement, skill and energy to perform such services in a manner consonant with the duties of his position and to improve and advance the business and interests of the Company and its affiliates. During the Employment Period, Executive shall comply with the Code of Conduct of the Company. Unless and to the extent inconsistent with the terms of any published Company policy or code of conduct as in effect on the date hereof and as hereafter amended, nothing contained herein shall preclude Executive from (a) serving on the board of directors of any business corporation with the consent of the Board or the Chairman, (b) serving on the board of, or working for, any charitable or community organization, or (c) pursuing his personal financial and legal affairs, so long as the foregoing activities, individually or collectively, do not interfere with the performance of Executive’s duties hereunder or violate any of the provisions of Section 9 hereof.

3. Compensation.

(a) Base Salary. During the Employment Period, the Company shall pay Executive a base salary at the annual rate as in effect on the date hereof. The annual base salary payable under this paragraph shall be reduced, however, to the extent that Executive elects to defer such salary under the terms of any deferred compensation or savings plan or arrangement maintained or established by the Company or its affiliates. The Board or the appropriate committee of the Board may in its discretion periodically review Executive’s base salary in light of competitive practices, the base salaries paid to other executive officers of the Company and the performance of Executive and the Company and its applicable affiliates, and may, in its discretion, increase such base salary by an amount it determines to be appropriate. Any such increase shall not reduce or limit any other obligation of the Company hereunder. Executive’s base salary (as set forth above or as may be increased from time to time) shall not be reduced following any Change of Control, but may be reduced prior to a Change of Control solely pursuant to a cost-saving plan or structural realignment of total compensation elements that includes all senior executives and only to the extent that such reduction is proportionate to the reductions applicable to other senior executives. Executive’s annual base salary

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payable hereunder, as it may be increased or reduced from time to time as provided herein and without reduction for any amounts deferred as described above, shall be referred to herein as “Base Salary.” The Company shall pay Executive the portion of his Base Salary not deferred not less frequently than in equal monthly installments.

(b) Annual Bonus. For each calendar year ending during the Employment Period, Executive shall have the opportunity to earn and receive an annual bonus, based on the achievement of target levels of performance, equal to the percentage of his Base Salary used to calculate such annual bonus as of the date hereof. Executive’s annual bonus opportunity may be increased above such percentage from time to time by the Board or the appropriate committee thereof. Executive’s annual bonus opportunity shall not be reduced following any Change of Control, but may be reduced prior to a Change of Control solely pursuant to a cost-saving plan or structural realignment of total compensation elements that includes all senior executives and only to the extent that such reduction is proportionate to the reductions applicable to other senior executives. Executive’s annual bonus opportunity, as it may be increased or reduced from time to time as provided herein, shall be referred to herein as “Target Bonus.” The actual bonus, if any, payable for any such year shall be determined in accordance with the terms of the Company’s Annual Executive Bonus Program or any successor annual incentive plan (the “Annual Plan”) based upon the performance of the Company and/or its applicable affiliates and/or Executive against target objectives established under such Annual Plan. Subject to Executive’s election to defer all or a portion of any annual bonus payable hereunder pursuant to the terms of any deferred compensation or savings plan or arrangement maintained or established by the Company or its affiliates, any annual bonus payable under this Section 3(b) shall be paid to Executive in accordance with the terms of the Annual Plan.

(c) Long-term Incentive Compensation. During the Employment Period, Executive shall participate in all of the Company’s existing and future long-term incentive compensation programs for key executives at a level commensurate with his position with the Company and consistent with the Company’s then current policies and practices, as determined in good faith by the Board or the appropriate committee of the Board.

4. Benefits, Perquisites and Expenses.

(a) Benefits. During the Employment Period, Executive (and, to the extent applicable, his dependents) shall be eligible to participate in or be covered under (i) each welfare benefit plan or program maintained or as hereafter amended or established by the Company or its applicable affiliates, including, without limitation, each group life, hospitalization, medical, dental, health, accident or disability insurance or similar plan or program of thereof, and (ii) each pension, retirement, savings, deferred compensation, stock purchase or other similar plan or program maintained or as hereafter amended or established by the Company or its applicable affiliates, in each case to the extent that Executive is eligible to participate in any such plan or program

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under the generally applicable provisions thereof. Nothing in this Section 4(a) shall limit the Company’s right to amend or terminate any such plan or program in accordance with the procedures set forth therein or as permitted by applicable law.

(b) Perquisites. For each calendar year during the Employment Period, Executive shall be entitled to at least the number of paid vacation days per year that Executive is entitled to as of the date hereof, and shall also be entitled to receive such other perquisites as are generally provided to him as of the date hereof or are hereafter provided to other similarly situated senior executives of the Company in accordance with the then current policies and practices of the Company.

(c) Business Expenses. During the Employment Period, the Company shall pay or reimburse Executive for all reasonable business expenses incurred or paid by Executive in the performance of Executive’s duties hereunder, upon presentation of expense statements or vouchers and such other information as the Company may require and in accordance with the generally applicable policies and procedures of the Company.

(d) Office and Support Staff. During the Employment Period, Executive shall be entitled to an office with furnishings and other material appointments, and to secretarial and other assistance, at a level that is at least commensurate with the foregoing provided to him as of the date hereof or is hereafter provided to other similarly situated senior executives of the Company.

(e) Indemnification. The Company shall indemnify Executive and hold Executive harmless from and against any claim, loss or cause of action, regardless whether asserted during or after the Employment Period, arising from or out of Executive’s performance as an officer, director or employee of the Company or any of its affiliates or in any other capacity, including any fiduciary capacity in which Executive serves at the request of the Company, to the maximum extent permitted by applicable law and under the Certificate of Incorporation and By-Laws of the Company, as may be amended from time to time (the “Governing Documents”), provided that in no event shall the protection afforded to Executive be less than that afforded under the Governing Documents as in effect on the Commencement Date.

5. Termination of Employment.

The provisions of this Section 5 shall apply prior to the occurrence of a Change of Control and, if Executive is still in the Company’s employ, shall again become applicable upon the third anniversary of such Change of Control.

(a) Early Termination of the Employment Period. Notwithstanding Section 1(b) hereof, the Employment Period shall end upon the earliest to occur of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination, (iv) a Termination Due to Retirement, (v) a Termination Due to Disability, or (vi) a Termination Due to Death.

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(b) Notice of Termination. Communication of termination under this Section 5 shall be made to the other party by Notice of Termination in the case of (i) a Termination For Cause, (ii) a Termination Without Cause, or (iii) a Voluntary Termination.

(c) Benefits Payable Upon Termination; Rules for Determining Reason for Termination.

(i) Benefits Payable Upon Termination. Following the end of the Employment Period pursuant to Section 5(a), Executive (or, in the event of his death, his surviving spouse, if any, or if none, his estate) shall be paid the type or types of compensation determined to be payable in accordance with the following table, such payment to be made in the form specified in such table and at the time established pursuant to Section 7 hereof. Capitalized terms used in such table shall have the meanings set forth in Section 5(d) hereof.

(ii) Rules for Determining Reason for Termination.

(A) If a Voluntary Termination occurs on a date that Executive is eligible for Retirement as defined in The Hartford Investment and Savings Plan, as may be amended from time to time, or any successor plan thereof (the “Savings Plan”), such Voluntary Termination shall instead be treated as a Termination Due to Retirement solely for purposes of this Section 5.

(B) No Termination Without Cause shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 5, notwithstanding the fact that, either on, before or after the date of termination of the Employment Period with respect thereto, (I) Executive was eligible for Retirement as defined in the Savings Plan, (II) Executive requested to be treated as a retiree for purposes of the Savings Plan or any other plan or program of the Company or its affiliates, or (III) Executive or the Company could have terminated Executive’s employment in a Termination Due to Disability hereunder.

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BENEFITS PAYABLE : NON-CHANGE OF CONTROL

						Vested	Welfare
	Accrued	Pro Rata Target	Severance			Benefits	Benefits
BENEFIT:	Salary	Bonus	Payment	Equity Awards	Vested Benefits	Enhancement	Continuation
FORM OF PAYMENT:	Lump Sum	Lump Sum	Lump Sum	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Lump Sum	Determined Under the Applicable Plan
Termination For Cause	Payable	Not Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Without Cause	Payable	Payable	Payable	Options /Restricted Stock: Payable Other Equity Awards: Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Due to Retirement	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Disability	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Death	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available

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(d) Definitions.

“Accrued Salary” means any Base Salary earned, but unpaid, for services rendered to the Company on or prior to the date on which the Employment Period ends pursuant to Section 5(a) (other than Base Salary deferred pursuant to Executive’s election, as contemplated by Section 3(a) hereof), plus any vacation pay accrued by Executive as of such date.

“Available” means that the particular benefit shall be made available to Executive to the extent specifically provided herein or required by applicable law.

“Determined Under the Applicable Plan” means that the determination of whether a particular benefit shall or shall not be paid to Executive, and, where specifically required by this Agreement, the timing or form of any benefit payment, shall be made solely by application of the terms of the plan or program providing such benefit, except to the extent that the terms of such plan or program are expressly superseded or modified by this Agreement.

“Equity Awards” means the outstanding stock option, restricted stock, performance share and other equity or long-term incentive compensation awards, if any, held by Executive as of the date of his termination.

“ERPs” means any excess retirement plans maintained or as hereafter amended or established by the Company or its applicable affiliates.

“ESPs” means any excess investment and savings plans maintained or as hereafter amended or established by the Company or its applicable affiliates.

“Lump Sum” means a single lump sum cash payment.

“Not Available” means that the particular benefit shall be not be made available to Executive, except to the extent required by applicable law.

“Notice of Termination” means (i) in the case of a Termination For Cause, a written notice given by the Company to Executive within 30 calendar days of the Company’s having actual knowledge of the events giving rise to such Termination For Cause, (ii) in the case of a Termination Without Cause, a written notice given by the Company to Executive at least 30 days before the

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effective date of such Termination Without Cause, and (iii) in the case of a Voluntary Termination, a written notice given by Executive to the Company indicating the effective date of Executive’s termination of the Employment Period in such Voluntary Termination, such effective date to be no earlier than 30 days following the date such notice is received by the Company from Executive.

“Not Payable” means (i) with respect to benefits other than Equity Awards, such benefits shall not be paid or otherwise provided to Executive, and (ii) with respect to Equity Awards, such Equity Awards, to the extent unvested, unexercisable, or subject to restrictions that have not yet lapsed, shall be forfeited and/or canceled as of the date of termination of the Employment Period, unless otherwise determined by the Board or the appropriate committee of the Board in its discretion.

“Payable” means (i) with respect to benefits other than those described in clause (ii) of this paragraph, such benefits shall be paid to Executive in the amount, at the time, and in the form specified herein, and (ii) with respect to benefits described in this clause (ii), the following shall apply solely in the event of a Termination Without Cause, notwithstanding anything in the applicable plan or program to the contrary: (A) with respect to any outstanding stock options not yet expired as of the date of termination of the Employment Period, Executive shall be treated as though he remained in the employ of the Company for the two year period following such date, and except to the extent that any such options first expire during such period under the applicable plan or program, (I) any such options that would have become vested over such two year period solely by reason of Executive remaining in the employ of the Company during such period shall become immediately vested and nonforfeitable, (II) with respect to any options that by their terms would vest if the stock of the Company or an affiliate were to reach a specified market price, such options shall become vested and nonforfeitable if and when such stock reaches such price during such two year period, and (III) Executive shall have an additional two years to exercise any vested options (beyond the time to exercise such options permitted under the applicable plan or program), and (B) with respect to any restricted stock subject to restrictions that have not yet lapsed as of the date of termination of the Employment Period, such restrictions shall be deemed to have lapsed and such restricted stock shall become immediately vested and nonforfeitable as of such date.

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“Pro-Rata Target Bonus” means an amount equal to the product of: (i) an amount equal to the Target Bonus Executive would have been entitled to receive under Section 3(b) for the calendar year in which the Employment Period terminates, and (ii) a fraction (the “Service Fraction”), the numerator of which is equal to the number of rounded months in such calendar year which have elapsed as of the date of such termination, and the denominator of which is 12; provided that, if the Employment Period terminates in the last quarter of any calendar year, the Pro-Rata Target Bonus shall be the amount determined under the above formula or, if greater, the product of: (A) the bonus that would have been paid to Executive based on actual performance for such calendar year, and (B) the Service Fraction.

“Severance Payment” means an amount equal to two times the sum of: (i) Executive’s Base Salary at the rate in effect as of the date of termination of the Employment Period, and (ii) Executive’s Target Bonus amount under Section 3(b) hereof for the calendar year in which the Employment Period terminates.

“Termination Due to Death” means a termination of Executive’s employment due to the death of Executive.

“Termination Due to Disability” means (i) a termination of Executive’s employment by the Company as a result of a determination by the Board or the appropriate committee thereof that Executive has been incapable of substantially fulfilling the positions, duties, responsibilities and obligations set forth in this Agreement on account of physical, mental or emotional incapacity resulting from injury, sickness or disease for a period of (A) at least four consecutive months, or (B) more than six months in any twelve month period, or (ii) Executive’s termination of employment on account of Disability as defined in The Hartford Investment and Savings Plan, as may be amended from time to time.

“Termination Due to Retirement” means Executive’s termination of employment on account of Executive’s Retirement as defined in The Hartford Investment and Savings Plan, as may be amended from time to time.

“Termination For Cause” means a termination of Executive’s employment by the Company for any of the following reasons: (i) Executive is convicted of or enters a plea of guilty or nolo contendere to a felony, a crime of moral turpitude, dishonesty, breach of trust or unethical business conduct, or any

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crime involving the business of the Company or its affiliates; (ii) in the performance of his duties hereunder or otherwise to the detriment of the Company or its affiliates, Executive engages in (A) willful misconduct, (B) willful or gross neglect, (C) fraud, (D) misappropriation, (E) embezzlement, or (F) theft; (iii) Executive willfully fails to adhere to the policies and practices of the Company or devote substantially all of his business time and effort to the affairs thereof, or disobeys the directions of the Board to do either of the foregoing; (iv) Executive breaches this Agreement in any material respect; (v) Executive is adjudicated in any civil suit to have committed, or acknowledges in writing or in any agreement or stipulation his commission, of any theft, embezzlement, fraud or other intentional act of dishonesty involving any other person; or (vi) Executive violates the Code of Conduct of the Company.

“Termination Without Cause” means any involuntary termination of Executive’s employment by the Company other than a Termination For Cause, a Termination Due to Disability or a Termination Due to Death.

“Vested Benefits” means amounts that are vested or that Executive is otherwise entitled to receive, without the performance by Executive of further services or the resolution of a contingency, under the terms of or in accordance with any investment and savings plan or retirement plan of the Company or its affiliates, and any ERPs or ESPs related thereto, and any deferred compensation or employee stock purchase plan or similar plan or program of the Company or its affiliates.

“Vested Benefits Enhancement” means (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable Federal rate as determined under Section 1274(d) of the Internal Revenue Code of 1986, as amended (the “Code”), of the additional retirement benefits that would have been payable or available to Executive under any ERPs, based on (A) the age and service Executive would have attained or completed had Executive continued in the Company’s employ until the second anniversary of the date of termination of the Employment Period, and (B) where compensation is a relevant factor, his pensionable compensation as of such date, such compensation to include, on the same terms as apply to other executives, any Severance Payment made to Executive, and (ii) solely for purposes vesting in any benefits under any ESPs, Executive shall be treated as having continued in the Company’s employ until the second anniversary of the date of termination of the Employment Period.

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“Voluntary Termination” means any voluntary termination of Executive’s Employment by Executive pursuant to this Section 5, other than a Termination Due to Retirement or a Termination Due to Disability by Executive.

“Welfare Benefits Continuation” means that until the second anniversary of the date of termination of the Employment Period, Executive and, if applicable, his dependents shall be entitled to continue participation in the life and health insurance benefit plans of the Company or its affiliates in which Executive and/or such dependents were participating as of the date of termination of the Employment Period, and such other welfare benefit plans thereof in which the Company is required by law to permit the participation of Executive and/or his dependents, (collectively, the “Welfare Benefit Plans”). Such participation shall be on the same terms and conditions (including the requirement that Executive pay any premiums generally paid by an employee) as would apply if Executive were still in the employ of the Company; provided that the continued participation of Executive and/or his dependents in such Welfare Benefit Plans shall cease on such earlier date as Executive may become eligible for comparable welfare benefits provided by a subsequent employer. To the extent that Welfare Benefits Continuation cannot be provided under the terms of the applicable plan, policy or program, the Company shall provide a comparable benefit under another plan or from the Company’s general assets.

6. Termination Following a Change of Control or Potential Change of Control.

This Section 6 shall apply (instead of Section 5) during the period commencing upon a Change of Control and continuing until the third anniversary thereof; provided that, in the event that Executive’s employment is terminated by the Company in a Termination Without Cause after the occurrence of a Potential Change of Control and a Change of Control occurs within one year following the date of such termination, then solely for purposes of this Agreement, Executive shall be deemed to have remained in the Company’s employ until the occurrence of the Change of Control and thereafter to have then been terminated by the Company in a Termination Without Cause. As a result, Executive shall be entitled to receive the excess of (i) the benefits payable in the event of a Termination Without Cause under this Section 6, over (ii) the amount of any benefits payable to Executive under Section 5.

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(a) Early Termination of the Employment Period. Notwithstanding Section 1(b) hereof, the Employment Period shall end upon the earliest to occur of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination Within 180 Days, (iv) a Voluntary Termination After 180 Days, (v) a Termination For Good Reason, (vi) a Termination Due to Retirement, (vii) a Termination Due to Disability, or (viii) a Termination Due to Death.

(b) Notice of Termination. Communication of termination under this Section 6 shall be made to the other party by Notice of Termination in the case of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination Within 180 Days, (iv) a Voluntary Termination After 180 Days, or (v) a Termination For Good Reason.

(c) Benefits Payable Upon Termination; Rules for Determining Reason for Termination.

(i)

Benefits Payable Upon Termination. Following the end of the Employment Period, Executive (or, in the event of his death, his surviving spouse, if any, or if none, his estate) shall be paid the type or types of compensation determined to be payable in accordance with the following table, such payment to be made in the form specified in such table and at the time established pursuant to Section 7 hereof. Capitalized terms used in such table (and otherwise in this Section 6) that are defined in Section 5, and not specifically defined in Section 6(d) hereof, shall have the meanings ascribed thereto under Section 5. Where such a capitalized term is defined solely in Section 6(d), or in both Section 5 and Section 6(d), such term shall have the meaning ascribed to it in Section 6(d).

(ii)

Rules for Determining Reason for Termination.

(A) No Termination Without Cause, Voluntary Termination Within 180 Days or Termination For Good Reason shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 6, notwithstanding the fact that, either on, before or after the Date of Termination with respect thereto, (I) Executive was eligible for Retirement as defined in the Savings Plan, (II) Executive requested to be treated as a retiree for purposes of the Savings Plan or any other plan or program of the Company or its affiliates, or (III) Executive or the Company could have terminated Executive’s employment in a Termination Due to Disability hereunder.

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(B) No Termination Due to Retirement shall be treated as a Voluntary Termination After 180 Days for purposes of this Section 6, notwithstanding the fact that the Date of Termination for such Termination Due to Retirement may occur within 180 days following a Change of Control.

(C) Notwithstanding any provision in this Agreement to the contrary, in the event of a Change of Control as described in clause (iii) or clause (iv) of the definition of the term Change of Control in Section 6(d) of this Agreement, if the employment of Executive involuntarily terminates on or after the date of a shareholder approval described in either of such clauses but before the date of a consummation described in either of such clauses, the date of termination of Executive’s employment shall be deemed for purposes of this Agreement to be the day following the date of the applicable consummation.

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BENEFITS PAYABLE: CHANGE OF CONTROL

	Accrued	Pro Rata Target	Severance			Vested Benefits	Welfare
BENEFIT	Salary	Bonus	Payment	Equity Awards	Vested Benefits	Enhancement	Benefits Continuation
FORM OF PAYMENT	Lump Sum	Lump Sum	Lump Sum	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Lump Sum	Determined Under the Applicable Plan
Termination For Cause	Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Without Cause	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination Within 180 Days	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination After 180 Days	Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination For Good Reason	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Termination Due to Retirement	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Disability	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Death	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available

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(d) Definitions.

“Beneficial Owner” means any Person who, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” (within the meaning of Rule 13d-3 under the Securities and Exchange Act of 1934, as amended (the “Act”)) of any securities of a company, including any such right pursuant to any agreement, arrangement or understanding (whether or not in writing), provided that: (i) a Person shall not be deemed the Beneficial Owner of any security as a result of an agreement, arrangement or understanding to vote such security (A) arising solely from a revocable proxy or consent given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the Exchange Act and the applicable rules and regulations thereunder, or (B) made in connection with, or to otherwise participate in, a proxy or consent solicitation made, or to be made, pursuant to, and in accordance with, the applicable provisions of the Exchange Act and the applicable rules and regulations thereunder, in either case described in clause (A) or (B) above, whether or not such agreement, arrangement or understanding is also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); and (ii) a Person engaged in business as an underwriter of securities shall not be deemed to be the Beneficial Owner of any security acquired through such Person’s participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition.

“Change of Control” means:

(i) a report on Schedule 13D shall be filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Act disclosing that any Person, other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company is the Beneficial Owner of twenty percent or more of the outstanding stock of the Company entitled to vote in the election of directors of the Company.

(ii) any person other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) entitled to vote in the election of directors of the Company for cash, securities or any other consideration, provided that after consummation of the offer, the Person in question is the Beneficial Owner of fifteen percent or more of the outstanding stock of the Company entitled to vote in the election of directors of the Company (calculated as provided in paragraph (d) of Rule 13d-3 under the Act in the case of rights to acquire stock);

(iii) any merger, consolidation, recapitalization or reorganization of the Company approved by the stockholders of the Company shall be cosummated, other than any such

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transaction immediately following which the persons who were the Beneficial Owners of the outstanding securities of the Company entitled to vote in the election of directors of the Company immediately prior to such transaction are the Beneficial Owners of at least 55% of the total voting power represented by the securities of the entity surviving such transaction entitled to vote in the election of directors of such entity (or the ultimate parent of such entity) in substantially the same relative proportions as their ownership of the securities of the Company entitled to vote in the election of directors of the Company immediately prior to such transaction; provided that, such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such threshold (or to preserve such relative voting power) is due solely to the acquisition of voting securities by an employee benefit plan of the Company, such surviving entity or any subsidiary of such surviving entity;

(iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company; approved by the stockholders of the Company shall be consummated; or

(v) within any 24 month period, the persons who were directors of The Hartford Company immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to the Company, provided that any director who was not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director (A) was elected to the Board by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually or by prior operation of this clause (v), and (B) was not designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (iii) or (iv) of this definition of the term Change of Control in Section 6(d) of this Agreement.

“Date of Termination” means (i) in the case of a termination of the Employment Period for which a Notice of Termination is required, the date of receipt of such Notice of Termination or, if later, the date specified therein, as the case may be, or (ii) in all other cases, the actual date on which Executive’s employment terminates during the Employment Period.

“Not Payable” means that a particular benefit shall not be paid or otherwise provided to Executive.

“Notice of Termination” means (i) in the case of a Termination For Cause, a written notice given by the Company to Executive, within 30 calendar days of the Company’s having actual knowledge of the events giving rise to such termination, (ii) in the case of a Termination Without Cause, a written notice given by the Company to Executive at least 30 calendar days

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before the effective date of such Termination Without Cause, (iii) in the case of a Voluntary Termination Within 180 Days or a Voluntary Termination After 180 Days, a written notice given by Executive to the Company at least 30 calendar days before the effective date of such termination, and (iv) in the case of a Termination For Good Reason, a written notice given by Executive to the Company within 180 days of Executive’s having actual knowledge of the events giving rise to such Termination For Good Reason, and which (A) indicates the specific termination provision in this Agreement relied upon, (B) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (C) if the termination date is other than the date of receipt of such notice, specifies the termination date of this Agreement (which date shall be not more than 15 days after the giving of such notice). The failure by Executive to set forth in such Notice of Termination any fact or circumstance that contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his rights hereunder.

“Payable” means that a particular benefit shall be paid to Executive in the amount, at the time, and in the form specified herein.

“Person” has the meaning ascribed to such term in Section 3(a)(9) of the Act, as supplemented by Section 13(d)(3) of the Act; provided, however, that Person shall not include (i) the Company, any subsidiary of the Company or any other Person controlled by the Company, (ii) any trustee or other fiduciary holding securities under any employee benefit plan of the Company or of any subsidiary of the Company, or (iii) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of securities of the Company.

“Potential Change of Control” means:

(i) a Person shall commence a tender offer, which if successfully consummated, would result in such Person being the Beneficial Owner of at least 15% of the stock of the Company entitled to vote in the election of directors of the Company;

(ii) the Company shall enter into an agreement the consummation of which shall constitute a Change of Control of the Company;

(iii) solicitation of proxies for the election of directors of the Company by anyone other than the Company, which, if such directors were elected, would result in the occurrence of a Change of Control described in Section 6(d) of this Agreement; or

(iv) any other event shall occur which is deemed to be a Potential Change of Control by the Board or the appropriate Committee thereof.

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“Severance Payment” means a cash amount equal to three times the sum of (i) Executive’s Base Salary at the rate in effect as of the Date of Termination, and (ii) Executive’s Target Bonus for such year.

“Termination For Cause” means the Company’s termination of Executive’s employment due to (i) Executive’s conviction of a felony; (ii) an act or acts of extreme dishonesty or gross misconduct on Executive’s part which result or are intended to result in material damage to the Company’s business or reputation; or (iii) repeated material violations by Executive of his obligations under Section 2 of this Agreement, which violations are demonstrably willful and deliberate on Executive’s part and which result in material damage to the Company’s business or reputation.

“Termination For Good Reason” means the occurrence of any of the following after the occurrence of a Potential Change of Control or a Change of Control:

(i) (A) the assignment to Executive of any duties inconsistent in any material adverse respect with Executive’s position, duties, authority or responsibilities as contemplated by Section 2 of this Agreement, or (B) any other material adverse change in such position, including titles, authority or responsibilities;

(ii) any failure by the Company to comply with any of the provisions of Sections 3 and 4 of this Agreement at a level of least equal to that in effect immediately preceding the Change of Control or a Potential Change of Control, other than an insubstantial or inadvertent failure remedied by the Company promptly after receipt of notice thereof given by Executive;

(iii) the Company’s requiring Executive to be based at any office or location more than 25 miles from the location at which he performed his services specified under Section 2 hereof immediately prior to the Change of Control or a Potential Change of Control, except for travel reasonably required in the performance of Executive’s responsibilities;

(iv) any failure by the Company to obtain the assumption and agreement to perform this Agreement by a successor as contemplated by Section 10(d) hereof; or

(v) any attempt by the Company to terminate the Executive’s employment in a Termination For Cause that is determined in a proceeding pursuant to Section 9 or Section 10 hereof not to constitute a Termination For Cause.

Notwithstanding the foregoing, a termination of Executive’s employment shall not be treated as a Termination For Good Reason (I) if Executive shall have consented in writing to the occurrence of the event giving rise to the claim of Termination For Good Reason, or (II) if Executive shall have delivered a Notice of Termination to the Company, and the facts and circumstances specified therein as providing

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a basis for such Termination For Good Reason are cured by the Company within 10 days of its receipt of such Notice of Termination.

“Vested Benefits Enhancement” means (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable Federal rate as determined under Section 1274(d) of the Internal Revenue Code of 1986, as amended (the “Code”), of the additional retirement benefits that would have been payable or available to Executive under any ERPs, based on (A) the age and service Executive would have attained or completed had Executive continued in the Company’s employ until the third anniversary of the occurrence of the Change of Control, and (B) where compensation is a relevant factor, his pensionable compensation as of the Date of Termination, such compensation to include, on the same terms as apply to other executives, any Severance Payment made to Executive, (ii) solely for purposes of vesting in any benefits under any ESPs, Executive shall be treated as having continued in the Company’s employ until the third anniversary of the occurrence of such Change of Control, and (iii) solely for the purposes of determining eligibility for retiree medical benefits under any retirement plan or any retiree welfare benefit plan, policy or program of the Company or its affiliates, and any ERPs related thereto, Executive shall be treated as having continued in the Company’s employ until the third anniversary of the occurrence of such Change of Control and to have retired on the last day of such period.

“Voluntary Termination Within 180 Days” means a termination of employment by Executive for any reason within the first 180 days following a Change of Control, and “Voluntary Termination After 180 Days” means a termination of employment by Executive other than a Termination For Good Reason, a Termination Due to Disability by Executive, or a Termination Due to Death within the remaining 2 years and 6 months following a Change of Control.

“Welfare Benefits Continuation” shall have the same meaning as that described in Section 5 hereof, except that the entitlement of Executive and/or his dependents to participation in the Welfare Benefit Plans shall continue until the third anniversary of the Date of Termination.

(d) Out-Placement Services. If the Employment Period terminates because of a Termination Without Cause or a Termination For Good Reason, Executive shall be entitled to out-placement services, provided by the Company or its designee at the Company’s expense, for 12 months following the Date of Termination, or such lesser period as the Executive may require such services.

(e) Certain Further Payments by Company.

(i) Tax Reimbursement Payment. In the event that any amount or benefit paid or distributed to Executive pursuant to this Agreement, taken together with any amounts or benefits otherwise

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paid or distributed to Executive by the Company or any affiliate (collectively, by the “Covered Payments”), are or become subject to the tax (the “Excise Tax”) imposed under Section 4999 of the Internal Revenue Code of 1986, as amended, or any similar tax that may hereafter be imposed, the Company shall pay to the Executive at the time specified in this Section an additional amount (the “Tax Reimbursement Payment”) such that the net amount retained by the Executive with respect to such Covered Payments, after deduction of any Excise Tax on the Covered Payments and any Federal, state and local income tax and other tax on the Tax Reimbursement Payment provided for by this Section, but before deduction for any Federal, state or local income or employment tax withholding on such Covered Payments, shall be equal to the amount of the Covered Payments.

(ii) Applicable Rules. For purposes of determining whether any of the Covered Payments will be subject to the Excise Tax and the amount of such Excise Tax,

(A) such Covered Payments will be treated as “parachute payments” within the meaning of Section 280G of the Code, and all “parachute payments” in excess of the “base amount” (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the good faith judgment of the Company’s independent certified public accountants appointed prior to the Effective Date or tax counsel selected by such accountants (the “Accountants”), the Company has a reasonable basis to conclude that such Covered Payments (in whole or in part) either do not constitute “parachute payments” or represent reasonable compensation for personal services actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the “base amount,” or such “parachute payments” are otherwise not subject to such Excise Tax, and

(B) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Accountants in accordance with the principles of Section 280G of the Code.

(iii) Additional Rules. For purposes of determining the amount of the Tax Reimbursement Payment, the Executive shall be deemed to pay: (A) Federal income taxes at the highest applicable marginal rate of Federal income taxation for the calendar year in which the Tax Reimbursement Payment is to be made, and (B) any applicable state and local income and other taxes at the highest applicable marginal rate of taxation for the calendar year in which the Tax Reimbursement Payment is to be made, net of the maximum reduction in Federal incomes taxes which could be obtained from the deduction of such state or local taxes if paid in such year.

(iv) Repayment or Additional Payment in Certain Circumstances.

(A) Repayment. In the event that the Excise Tax is subsequently determined by the Accountants or pursuant to any proceeding or negotiations with the Internal Revenue Service to

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be less than the amount taken into account hereunder in calculating the Tax Reimbursement Payment made, Executive shall repay to the Company, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior Tax Reimbursement Payment that would not have been paid if such lesser Excise Tax had been applied in initially calculating such Tax Reimbursement Payment. Notwithstanding the foregoing, in the event any portion of the Tax Reimbursement Payment to be repaid to the Company has been paid to any Federal, state or local tax authority, repayment thereof shall not be required until actual refund or credit of such portion has been made to Executive by the applicable tax authority. Executive and the Company shall mutually agree upon the course of action to be pursued (and the method of allocating the expenses thereof) if Executive’s good faith claim for refund or credit is denied.

(B) Additional Tax Reimbursement Payment. In the event that the Excise Tax is later determined by the Accountants or pursuant to any proceeding or negotiations with the Internal Revenue Service to exceed the amount taken into account hereunder at the time the Tax Reimbursement Payment is made (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of the Tax Reimbursement Payment), the Company shall make an additional Tax Reimbursement Payment in respect of such excess (plus any interest or penalty payable with respect to such excess) at the time that the amount of such excess is finally determined.

(v) Timing for Tax Reimbursement Payment. The Tax Reimbursement Payment (or portion thereof) provided for in this Section 6 shall be paid to Executive not later than 10 business days following the payment of the Covered Payments; provided, however, that if the amount of such Tax Reimbursement Payment (or portion thereof) cannot be finally determined on or before the date on which payment is due, the Company shall pay to Executive by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than 45 calendar days after payment of the related Covered Payment. To the extent that the amount of the estimated Tax Reimbursement Payment exceeds the amount subsequently determined to have been due, Executive shall repay such excess to the Company on the fifth business day after written demand by the Company for payment.

7. Timing of Payments.

Accrued Salary, Severance Payments and Vested Benefits Enhancements shall be paid no later than 10 days following the termination of the Employment Period. Pro-Rata Target Bonus shall be paid as follows: (a) if the Employment Period terminates in the first, second or third calendar quarter of any

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particular calendar year, then the Pro-Rata Target Bonus shall be paid no later than 10 days following the termination of the Employment Period; or (b) if the Employment Period terminates in the fourth calendar quarter of any particular calendar year, then the Pro-Rata Target Bonus shall be paid no later than the same time as similar awards are paid to other executives participating in the plans or programs under which the awards are paid, but in no event later than March 31 of the calendar year following the end of such fourth calendar quarter. Vested Benefits and Equity Awards shall be paid no later than the time for payment Determined Under the Applicable Plan except as otherwise expressly superseded or modified by this Agreement. Tax Reimbursement Payments shall be paid at the time specified in Section 6 hereof. Notwithstanding the foregoing, solely for purposes of amounts payable pursuant to Section 5 hereof, if any amount payable to Executive pursuant to Section 5 would be nondeductible by the Company under Section 162(m) of the Code if paid in the year of Executive’s termination, the Company shall have the option of paying such nondeductible amount, with interest at the one-year treasury bill rate as in effect on the date of such termination as reported in the Wall Street Journal, on the first day of the second calendar quarter in the year following such termination.

8. Full Discharge of Company Obligations.

Except in the case of amounts payable to Executive in the event of a termination of employment following a Potential Change of Control as described in the first paragraph of Section 6, and except as expressly provided in the last sentence of this Section 8, the amounts payable to Executive pursuant to Section 5 following termination of his employment (including amounts payable with respect to Vested Benefits) shall be in full and complete satisfaction of Executive’s rights under Section 5 of this Agreement and any other claims he may have in respect of his employment by the Company or any of its affiliates. Such amounts shall constitute liquidated damages with respect to any and all such rights and claims and, upon Executive’s receipt of such amounts, the Company shall be released and discharged from any and all liability to Executive in connection with Section 5 of this Agreement or otherwise in connection with Executive’s employment with the Company and its affiliates. Nothing in this Section 8 shall be construed to release the Company from its obligation to indemnify Executive as provided in Section 4(e) hereof.

9. Noncompetition, Confidentiality and Other Covenants.

By and in consideration of the compensation and benefits to be provided by the Company hereunder, including the severance arrangements set forth herein, Executive agrees to the following:

(a) Noncompetition. During the Employment Period and until the earlier of: (i) the last day of the one year period following any Voluntary Termination of the Employment Period by Executive pursuant to Section 5 hereof, or (ii) the date a Change of Control occurs (the “Restriction Period”), Executive shall not become associated with any entity, whether as a principal, partner, employee, agent, consultant, shareholder (other than as a holder, or a member of

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a group which is a holder, of not in excess of 1% of the outstanding voting shares of any publicly traded company) or in any other relationship or capacity, paid or unpaid, that is actively engaged in any geographic area in any business which is in competition with the business of the Company. Notwithstanding anything herein to the contrary, the terms of this Section 9(a) shall not apply in the event of any termination of employment following a Change of Control as provided for in Section 6 of this Agreement, including any termination following a potential Change of Control as described in the first paragraph of Section 6.

(b) Confidentiality. Without the prior written consent of the Company, except to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency, Executive shall not disclose to any third person, or permit the use of for the benefit of any person or any entity other than The Company or its affiliates, any trade secrets, customer lists, information regarding product development, marketing plans, sales plans, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, financial records, or other financial, organizational, commercial, business, sales, marketing, technical, product or employee information relating to the Company or its affiliates or information designated as confidential, proprietary, and/or a trade secret, or any other information relating to the Company or its affiliates that Executive knows from the circumstances, in good faith and good conscience, should be treated as confidential, or any information that the Company or its affiliates may receive belonging to customers, agents or others who do business with the Company or its affiliates, except to the extent that any such information previously has been disclosed to the public by the Company or is in the public domain (other than by reason of Executive’s violation of this Section 9(b)).

(c) Non-Solicitation of Employees. During the Employment Period and until the earlier of: (i) the last day of the one year period following any Voluntary Termination of the Employment Period by Executive pursuant to Section 5 hereof, or (ii) the date of Change of Control occurs, Executive shall not directly or indirectly solicit, encourage or induce any employee of the Company or its affiliates to terminate employment with such entity, and shall not directly or indirectly, either individually or as owner, agent, employee, consultant or otherwise, employ or offer employment to any person who is or was employed by the Company or an affiliate thereof unless such person shall have ceased to be employed by such entity for a period of at least six months. Notwithstanding anything herein to the contrary, the terms of this Section 9(c) shall not apply in the event of any termination of employment following a Change of Control as provided for in Section 6 of this Agreement, including any termination following a potential Change of Control as described in the first paragraph of Section 6.

(d) Company Property. Except as expressly provided herein, promptly following any termination of the Employment Period, Executive shall return to the Company all property of the Company, and all copies thereof in Executive’s possession or under his control.

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(e) Injunctive Relief and Other Remedies with Respect to Covenants. Executive acknowledges and agrees that the covenants and obligations of Executive with respect to noncompetition, confidentiality, nonsolicitation, and Company property relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, Executive agrees that the Company (i) shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) restraining Executive from committing any violation of the covenants and obligations contained in this Section 9, and (ii) shall have no further obligation to make any payments to Executive hereunder following any material violation of the covenants and obligations contained in this Section 9. These remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity. In connection with the foregoing provisions of this Section 9, Executive represents that his economic means and circumstances are such that such provisions will not prevent him from providing for himself and his family on a basis satisfactory to him. Notwithstanding the foregoing, in no event shall an asserted violation of the provisions of this Section constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement following a Change of Control.

10. Miscellaneous.

(a) Survival. All of the provisions of Sections 5 (relating to termination of the Employment Period prior to a Change of Control), 6 (relating to termination of the Employment Period following a Change of Control or a Potential Change of Control), 9 (relating to noncompetition, confidentiality, nonsolicitation and Company property), 10(b) (relating to arbitration), 10(c) (relating to legal fees) and 10(n) (relating to governing law) of this Agreement shall survive the termination of this Agreement.

(b) Arbitration. Except as provided in Section 9, any dispute or controversy arising under or in connection with this Agreement shall be resolved by binding arbitration. Such arbitration shall be held in the city of Hartford, Connecticut and except to the extent inconsistent with this Agreement, shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect at the time of the arbitration, and otherwise in accordance with the principles that would be applied by a court of law or equity. The arbitrator shall be acceptable to both the Company and Executive. If the parties cannot agree on an acceptable arbitrator, the dispute or controversy shall be heard by a panel of three arbitrators; one appointed by each of the parties and the third appointed by the other two arbitrators. The Company and Executive further agree that they will abide by and perform any award or awards rendered by the arbitrators and that a judgment may be entered on any award or awards rendered by any state or federal court having jurisdiction over the Company or Executive or any of their respective property.

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(c) Legal Fees and Expenses. In any contest (whether initiated by Executive or by the Company) as to the validity, enforceability or interpretation of any provision of this Agreement, the Company shall pay Executive’s legal expenses (or cause such expenses to be paid) including, without limitation, his reasonable attorney’s fees, on a quarterly basis, upon presentation of proof of such expenses in a form acceptable to the Company, provided that Executive shall reimburse the Company for such amounts, plus simple interest thereon at the 90-day United States Treasury Bill rate as in effect from time to time, compounded annually, if Executive shall not prevail, in whole or in part, as to any material issue as to the validity, enforceability or interpretation of any provision of this Agreement.

(d) Successors; Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Company and its successors. The Company shall require any successor to all or substantially all of the business and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform the Agreement if no such succession had taken place. This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by Executive otherwise than by will or the law of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

(e) Assignment. Except as provided in Section 10(d), neither this Agreement nor any of the rights or obligations hereunder shall be assigned or delegated by any party hereto without the prior written consent of the other party.

(f) Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the matters referred to herein. This Agreement supersedes and replaces any prior employment or severance agreement or arrangement between the Company and Executive. No other agreement relating to the terms of Executive’s employment by the Company, oral or otherwise, shall be binding between the parties unless it is in writing and signed by the party against whom enforcement is sought. There are no promises, representations, inducements or statements between the parties other than those that are expressly contained herein. Executive acknowledges that he is entering into this Agreement of his own free will and accord, and with no duress, and that he has read this Agreement and that he understands it and its legal consequences.

(g) Severability; Reformation. In the event that one or more of the provisions of this Agreement shall become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. In the event of a determination that any of the provisions of Section 9(a), Section 9(b) or Section 9(c) are not enforceable in accordance with their terms, Executive and the Company agree that

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such Section shall be reformed to make such Section enforceable in a manner that provides the Company the maximum rights permitted at law.

(h) Waiver. Waiver by any party hereto of any breach or default by the other party of any of the terms of this Agreement shall not operate as a waiver of any other breach or default, whether similar to or different from the breach or default waived. No waiver of any provision of this Agreement shall be implied from any course of dealing between the parties hereto or from any failure by either party hereto to assert its or his rights hereunder on any occasion or series of occasions.

(i) Notices. Any notice required or desired to be delivered under this Agreement shall be in writing and shall be delivered personally, by courier service, by registered mail, return receipt requested, or by telecopy and shall be effective upon actual receipt by the party to which such notice shall be directed, and shall be addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):

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If to the Company:	The Hartford Financial Services Group, Inc.
	Law Department, HO-1-09
	Hartford Plaza
	Hartford, CT 06115
	Attention: Corporate Secretary
with a copy to:	Debevoise & Plimpton
	875 Third Avenue
	New York, NY 10022
	Attn: Lawrence K. Cagney, Esq.
If to Executive:	The home address of Executive shown on the records of the Company

(j) Amendments. This Agreement may not be altered, modified or amended except by a written instrument signed by each of the parties hereto.

(k) Headings. Headings to provisions of this Agreement are for the convenience of the parties only and are not intended to be part of or to affect the meaning or interpretation hereof.

(l) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(m) Withholding. Any payments provided for herein shall be reduced by any amounts required to be withheld by the Company from time to time under applicable Federal, State or local income or employment tax laws or similar statutes or other provisions of law then in effect.

(n) Governing Law. This Agreement shall be governed by the laws of the State of Connecticut, without reference to principles of conflicts or choice of law under which the law of any other jurisdiction would apply.

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EX-10.03

Exhibit 10.03

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT, dated as of July 1, 2000, by and between The Hartford Financial Services Group, Inc. (“The Hartford” or the “Company”), a Delaware corporation, and Thomas M. Marra (“Executive”).

WITNESSETH:

          WHEREAS, the Company wishes to recognize the substantial services that Executive has provided to the Company; and

          WHEREAS, the Company desires that Executive continue to perform such services and to enter into an agreement embodying the terms of such employment (the “Agreement”); and

          WHEREAS, Executive desires to continue such employment and enter into such Agreement;

          NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Company and Executive hereby agree as follows:

1. Employment.

(a) Agreement to Employ. Upon the terms and subject to the conditions of this Agreement, the Company hereby agrees to continue to employ Executive and Executive hereby agrees to continue his employment by the Company.

(b) Term of Employment. Except as otherwise provided below, the Company shall employee Executive for the period commencing on July 1, 2000, (the Commencement Date”) and ending on the third anniversary of the Commencement Date. At the expiration of the original term or any extended term (each a “Renewal Date”), Executive’s employment hereunder shall be extended automatically, upon the same terms and conditions, for successive one-year periods, unless either party shall give written notice to the other of its intention not to renew such employment at least fifteen months prior to such Renewal Date. Without limiting the generality of the foregoing, upon the occurrence of a Change of Control (as defined below), the term of this Agreement shall be extended automatically without any action by either party until the third anniversary of such Change of Control. Notwithstanding the foregoing, if not previously terminated pursuant to Sections 1(b), 5(a) or 6(a), the term of this Agreement shall terminate on the last day of the month in which Executive attains age 65, and such a termination upon Executive reaching age 65

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shall be deemed to be a Termination Due to Retirement for purposes of this Agreement. The period during which Executive is employed pursuant to this Agreement, including any extension thereof in accordance with this Section 1(b), shall be referred to as the “Employment Period.”

2. Position and Duties.

During the Employment Period, Executive shall serve as Executive Vice President of The Hartford and Chief Operating Officer of Hartford Life, Inc. and/or in such other position or positions with the Company or its affiliates commensurate with his position and experience as the Board of Directors of the Company (the “Board”) or the Chairman of the Company (the “Chairman”) shall from time to time specify. During the Employment Period, Executive shall have the duties, responsibilities and obligations customarily assigned to individuals serving in the position or positions in which Executive serves hereunder and such other duties, responsibilities and obligations as the Board or the Chairman shall from time to time specify. Executive shall devote his full time to the services required of him hereunder, except for vacation time and reasonable periods of absence due to sickness, personal injury or other disability, and shall use his best efforts, judgement, skill and energy to perform such services in a manner consonant with the duties of his position and to improve and advance the business and interests of the Company and its affiliates. During the Employment Period, Executive shall comply with the Code of Conduct of the Company. Unless and to the extent inconsistent with the terms of any published Company policy or code of conduct as in effect on the date hereof and as hereafter amended, nothing contained herein shall preclude Executive from (a) serving on the board of directors of any business corporation with the consent of the Board or the Chairman, (b) serving on the board of, or working for, any charitable or community organization, or (c) pursuing his personal financial and legal affairs, so long as the foregoing activities, individually or collectively, do not interfere with the performance of Executive’s duties hereunder or violate any of the provisions of Section 9 hereof.

3. Compensation.

(a) Base Salary. During the Employment Period, the Company shall pay Executive a base salary at the annual rate as in effect on the date hereof. The annual base salary payable under this paragraph shall be reduced, however, to the extent that Executive elects to defer such salary under the terms of any deferred compensation or savings plan or arrangement maintained or established by the Company or its affiliates. The Board or the appropriate committee of the Board may in its discretion periodically review Executive’s base salary in light of competitive practices, the base salaries paid to other executive officers of the Company and the performance of Executive and the Company and its applicable affiliates, and may, in its discretion, increase such base salary by an amount it determines to be appropriate. Any such increase shall not reduce or limit any other obligation of the Company hereunder. Executive’s base salary (as set forth above or as may be increased from time to time) shall not be reduced following any Change of Control, but may be reduced prior to a Change of Control solely pursuant to a cost-saving plan or structural realignment of total compensation elements that includes all senior executives and only to the extent that such reduction is proportionate to the reductions applicable to other senior executives. Executive’s annual base salary payable hereunder, as it may be increased or reduced from time to time as provided herein and without reduction for any amounts deferred as described above, shall be referred to herein as “Base Salary.” The Company shall

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pay Executive the portion of his Base Salary not deferred not less frequently than in equal monthly installments.

(b) Annual Bonus. For each calendar year ending during the Employment Period, Executive shall have the opportunity to earn and receive an annual bonus, based on the achievement of target levels of performance, equal to the percentage of his Base Salary used to calculate such annual bonus as of the date hereof. Executive’s annual bonus opportunity may be increased above such percentage from time to time by the Board or the appropriate committee thereof. Executive’s annual bonus opportunity shall not be reduced following any Change of Control, but may be reduced prior to a Change of Control solely pursuant to a cost-saving plan or structural realignment of total compensation elements that includes all senior executives and only to the extent that such reduction is proportionate to the reductions applicable to other senior executives. Executive’s annual bonus opportunity, as it may be increased or reduced from time to time as provided herein, shall be referred to herein as “Target Bonus.” The actual bonus, if any, payable for any such year shall be determined in accordance with the terms of the Company’s Annual Executive Bonus Program or any successor annual incentive plan (the “Annual Plan”) based upon the performance of the Company and/or its applicable affiliates and/or Executive against target objectives established under such Annual Plan. Subject to Executive’s election to defer all or a portion of any annual bonus payable hereunder pursuant to the terms of any deferred compensation or savings plan or arrangement maintained or established by the Company or its affiliates, any annual bonus payable under this Section 3(b) shall be paid to Executive in accordance with the terms of the Annual Plan.

(c) Long-term Incentive Compensation. During the Employment Period, Executive shall participate in all of the Company’s existing and future long-term incentive compensation programs for key executives at a level commensurate with his position with the Company and consistent with the Company’s then current policies and practices, as determined in good faith by the Board or the appropriate committee of the Board.

4. Benefits, Perquisites and Expenses.

(a) Benefits. During the Employment Period, Executive (and, to the extent applicable, his dependents) shall be eligible to participate in or be covered under (i) each welfare benefit plan or program maintained or as hereafter amended or established by the Company or its applicable affiliates, including, without limitation, each group life, hospitalization, medical, dental, health, accident or disability insurance or similar plan or program of thereof, and (ii) each pension, retirement, savings, deferred compensation, stock purchase or other similar plan or program maintained or as hereafter amended or established by the Company or its applicable affiliates, in each case to the extent that Executive is eligible to participate in any such plan or program under the generally applicable provisions thereof. Nothing in this Section 4(a) shall limit the Company’s right to amend or terminate any such plan or program in accordance with the procedures set forth therein or as permitted by applicable law.

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(b)	Perquisites. For each calendar year during the Employment Period, Executive shall be entitled to at least the number of paid vacation days per year that Executive is entitled to as of the date hereof, and shall also be entitled to receive such other perquisites as are generally provided to him as of the date hereof or are hereafter provided to other similarly situated senior executives of the Company in accordance with the then current policies and practices of the Company.
(c)	Business Expenses. During the Employment Period, the Company shall pay or reimburse Executive for all reasonable business expenses incurred or paid by Executive in the performance of Executive’s duties hereunder, upon presentation of expense statements or vouchers and such other information as the Company may require and in accordance with the generally applicable policies and procedures of the Company.
(d)	Office and Support Staff. During the Employment Period, Executive shall be entitled to an office with furnishings and other material appointments, and to secretarial and other assistance, at a level that is at least commensurate with the foregoing provided to him as of the date hereof or is hereafter provided to other similarly situated senior executives of the Company.
(e)	Indemnification. The Company shall indemnify Executive and hold Executive harmless from and against any claim, loss or cause of action, regardless whether asserted during or after the Employment Period, arising from or out of Executive’s performance as an officer, director or employee of the Company or any of its affiliates or in any other capacity, including any fiduciary capacity in which Executive serves at the request of the Company, to the maximum extent permitted by applicable law and under the Certificate of Incorporation and By-Laws of the Company, as may be amended from time to time (the “Governing Documents”), provided that in no event shall the protection afforded to Executive be less than that afforded under the Governing Documents as in effect on the Commencement Date.

5. Termination of Employment.

The provisions of this Section 5 shall apply prior to the occurrence of a Change of Control and, if Executive is still in the Company’s employ, shall again become applicable upon the third anniversary of such Change of Control.

(a)	Early Termination of the Employment Period. Notwithstanding Section 1(b) hereof, the Employment Period shall end upon the earliest to occur of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination, (iv) a Termination Due to Retirement, (v) a Termination Due to Disability, or (vi) a Termination Due to Death.
(b)	Notice of Termination. Communication of termination under this Section 5 shall be made to the other party by Notice of Termination in the case of (i) a Termination For Cause, (ii) a Termination Without Cause, or (iii) a Voluntary Termination.

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(c) Benefits Payable Upon Termination; Rules for Determining Reason for Termination.

(i)

Benefits Payable Upon Termination. Following the end of the Employment Period pursuant to Section 5(a), Executive (or, in the event of his death, his surviving spouse, if any, or if none, his estate) shall be paid the type or types of compensation determined to be payable in accordance with the following table, such payment to be made in the form specified in such table and at the time established pursuant to Section 7 hereof. Capitalized terms used in such table shall have the meanings set forth in Section 5(d) hereof.

(ii)

Rules for Determining Reason for Termination.

(A)

If a Voluntary Termination occurs on a date that Executive is eligible for Retirement as defined in The Hartford Investment and Savings Plan, as may be amended from time to time, or any successor plan thereof (the “Savings Plan”), such Voluntary Termination shall instead be treated as a Termination Due to Retirement solely for purposes of this Section 5.

(B)

No Termination Without Cause shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 5, notwithstanding the fact that, either on, before or after the date of termination of the Employment Period with respect thereto, (I) Executive was eligible for Retirement as defined in the Savings Plan, (II) Executive requested to be treated as a retiree for purposes of the Savings Plan or any other plan or program of the Company or its affiliates, or (III) Executive or the Company could have terminated Executive’s employment in a Termination Due to Disability hereunder.

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BENEFITS PAYABLE: NON-CHANGE OF CONTROL

							Welfare
	Accrued	Pro Rata Target	Severance			Vested Benefits	Benefits
BENEFIT:	Salary	Bonus	Payment	Equity Awards	Vested Benefits	Enhancement	Continuation
FORM OF				Determined Under the	Determined Under the		Determined Under the
PAYMENT:	Lump Sum	Lump Sum	Lump Sum	Applicable Plan	Applicable Plan	Lump Sum	Applicable Plan
Termination For Cause	Payable	Not Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Without Cause	Payable	Payable	Payable	Options / Restricted Stock: Payable	Determined Under the Applicable Plan	Payable	Available
				Other Equity Awards: Determined Under the Applicable Plan
Voluntary Termination	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Due to Retirement	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Disability	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Death	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available

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(d) Definitions.

“Accrued Salary” means any Base Salary earned, but unpaid, for services rendered to the Company on or prior to the date on which the Employment Period ends pursuant to Section 5(a) (other than Base Salary deferred pursuant to Executive’s election, as contemplated by Section 3(a) hereof), plus any vacation pay accrued by Executive as of such date.

“Available” means that the particular benefit shall be made available to Executive to the extent specifically provided herein or required by applicable law.

“Determined Under the Applicable Plan” means that the determination of whether a particular benefit shall or shall not be paid to Executive, and, where specifically required by this Agreement, the timing or form of any benefit payment, shall be made solely by application of the terms of the plan or program providing such benefit, except to the extent that the terms of such plan or program are expressly superseded or modified by this Agreement.

“Equity Awards” means the outstanding stock option, restricted stock, performance share and other equity or long-term incentive compensation awards, if any, held by Executive as of the date of his termination.

“ERPs” means any excess retirement plans maintained or as hereafter amended or established by the Company or its applicable affiliates.

“ESPs” means any excess investment and savings plans maintained or as hereafter amended or established by the Company or its applicable affiliates.

“Lump Sum” means a single lump sum cash payment.

“Not Available” means that the particular benefit shall be not be made available to Executive, except to the extent required by applicable law.

“Not Payable” means (i) with respect to benefits other than Equity Awards, such benefits shall not be paid or otherwise provided to Executive, and (ii) with respect to Equity Awards, such Equity Awards, to the extent unvested, unexercisable, or subject to restrictions that have not yet lapsed, shall be forfeited and/or canceled as of the date of termination of the Employment Period, unless otherwise determined by the relevant Board or the appropriate committee of the Board in its discretion.

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“Notice of Termination” means (i) in the case of a Termination For Cause, a written notice given by the Company to Executive within 30 calendar days of the Company’s having actual knowledge of the events giving rise to such Termination For Cause, (ii) in the case of a Termination Without Cause, a written notice given by the Company to Executive at least 30 calendar days before the effective date of such Termination Without Cause, and (iii) in the case of a Voluntary Termination, a written notice given by Executive to the Company indicating the effective date of Executive’s termination of the Employment Period in such Voluntary Termination, such effective date to be no earlier than 30 days following the date such notice is received by the Company from Executive.

“Payable” means (i) with respect to benefits other than those described in clause (ii) of this paragraph, such benefits shall be paid to Executive in the amount, at the time, and in the form specified herein, and (ii) with respect to benefits described in this clause (ii), the following shall apply solely in the event of a Termination Without Cause, notwithstanding anything in the applicable plan or program to the contrary: (A) with respect to any outstanding stock options not yet expired as of the date of termination of the Employment Period, Executive shall be treated as though he remained in the employ of the Company for the two year period following such date, and except to the extent that any such options first expire during such period under the applicable plan or program, (I) any such options that would have become vested over such two year period solely by reason of Executive remaining in the employ of the Company during such period shall become immediately vested and nonforfeitable, (II) with respect to any options that by their terms would vest if the stock of the Company or an affiliate were to reach a specified market price, such options shall become vested and nonforfeitable if and when such stock reaches such price during such two year period, and (III) Executive shall have an additional two years to exercise any vested options (beyond the time to exercise such options permitted under the applicable plan or program), and (B) with respect to any restricted stock subject to restrictions that have not yet lapsed as of the date of termination of the Employment Period, such restrictions shall be deemed to have lapsed and such restricted stock shall become immediately vested and nonforfeitable as of such date.

“Pro-Rata Target Bonus” means an amount equal to the product of: (i) an amount equal to the Target Bonus Executive would have been entitled to receive under Section 3(b) for the calendar year in which the Employment Period terminates, and (ii) a fraction (the “Service Fraction”), the numerator of which is equal to the number of rounded months in such calendar year which have elapsed as of the date of such termination, and the denominator of which is 12; provided that, if the Employment Period terminates in the last quarter of any calendar year, the Pro-Rata Target Bonus shall be the amount determined under the above formula or, if greater, the product of: (A) the bonus that would have been paid to Executive based on actual performance for such calendar year, and (B) the Service Fraction.

“Severance Payment” means an amount equal to two times the sum of: (i) Executive’s Base Salary at the rate in effect as of the date of termination of the Employment Period, and (ii) Executive’s Target Bonus amount under Section 3(b) hereof for the calendar year in which the Employment Period terminates.

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“Termination Due to Death” means a termination of Executive’s employment due to the death of Executive.

“Termination Due to Disability” means (i) a termination of Executive’s employment by the Company as a result of a determination by the Board or the appropriate committee thereof that Executive has been incapable of substantially fulfilling the positions, duties, responsibilities and obligations set forth in this Agreement on account of physical, mental or emotional incapacity resulting from injury, sickness or disease for a period of (A) at least four consecutive months, or (B) more than six months in any twelve month period, or (ii) Executive’s termination of employment on account of Disability as defined in The Hartford Investment and Savings Plan, as may be amended from time to time.

“Termination Due to Retirement” means Executive’s termination of employment on account of Executive’s Retirement as defined in The Hartford Investment and Savings Plan, as may be amended from time to time.

“Termination For Cause” means a termination of Executive’s employment by the Company for any of the following reasons: (i) Executive is convicted of or enters a plea of guilty or nolo contendere to a felony, a crime of moral turpitude, dishonesty, breach of trust or unethical business conduct, or any crime involving the business of the Company or its affiliates; (ii) in the performance of his duties hereunder or otherwise to the detriment of the Company or its affiliates, Executive engages in (A) willful misconduct, (B) willful or gross neglect, (C) fraud, (D) misappropriation, (E) embezzlement, or (F) theft; (iii) Executive willfully fails to adhere to the policies and practices of the Company or devote substantially all of his business time and effort to the affairs thereof, or disobeys the directions of the Board to do either of the foregoing; (iv) Executive breaches this Agreement in any material respect; (v) Executive is adjudicated in any civil suit to have committed, or acknowledges in writing or in any agreement or stipulation his commission, of any theft, embezzlement, fraud or other intentional act of dishonesty involving any other person; or (vi) Executive violates the Code of Conduct of the Company.

“Termination Without Cause” means any involuntary termination of Executive’s employment by the Company other than a Termination For Cause, a Termination Due to Disability or a Termination Due to Death.

“Vested Benefits” means amounts that are vested or that Executive is otherwise entitled to receive, without the performance by Executive of further services or the resolution of a contingency, under the terms of or in accordance with any investment and savings plan or retirement plan (including any plan providing retiree medical benefits) of the Company or its affiliates, and any ERPs or ESPs related thereto, and any deferred compensation or employee stock purchase plan or similar plan or program of the Company or its affiliates.

“Vested Benefits Enhancement” means (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable Federal rate as determined under Section 1274(d) of the Internal Revenue Code of 1986, as amended (the “Code”), of the additional retirement benefits that would have been payable or available to

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Executive under any ERPs, based on (A) the age and service Executive would have attained or completed had Executive continued in the Company’s employ until the second anniversary of the date of termination of the Employment Period, and (B) where compensation is a relevant factor, his pensionable compensation as of such date, such compensation to include, on the same terms as apply to other executives, any Severance Payment made to Executive, and (ii) solely for purposes vesting in any benefits under any ESPs, Executive shall be treated as having continued in the Company’s employ until the second anniversary of the date of termination of the Employment Period.

“Voluntary Termination” means any voluntary termination of Executive’s Employment by Executive pursuant to this Section 5, other than a Termination Due to Retirement or a Termination Due to Disability by Executive.

“Welfare Benefits Continuation” means that until the second anniversary of the date of termination of the Employment Period, Executive and, if applicable, his dependents shall be entitled to continue participation in the life and health insurance benefit plans of the Company or its affiliates in which Executive and/or such dependents were participating as of the date of termination of the Employment Period, and such other welfare benefit plans thereof in which the Company is required by law to permit the participation of Executive and/or his dependents, (collectively, the “Welfare Benefit Plans”). Such participation shall be on the same terms and conditions (including the requirement that Executive pay any premiums generally paid by an employee) as would apply if Executive were still in the employ of the Company; provided that the continued participation of Executive and/or his dependents in such Welfare Benefit Plans shall cease on such earlier date as Executive may become eligible for comparable welfare benefits provided by a subsequent employer. To the extent that Welfare Benefits Continuation cannot be provided under the terms of the applicable plan, policy or program, the Company shall provide a comparable benefit under another plan or from the Company’s general assets.

6. Termination Following a Change of Control or Potential Change of Control.

This Section 6 shall apply (instead of Section 5) during the period commencing upon a Change of Control and continuing until the third anniversary thereof; provided that, in the event that Executive’s employment is terminated by the Company in a Termination Without Cause after the occurrence of a Potential Change of Control and a Change of Control occurs within one year following the date of such termination, then solely for purposes of this Agreement, Executive shall be deemed to have remained in the Company’s employ until the occurrence of the Change of Control and thereafter to have then been terminated by the Company in a Termination Without Cause. As a result, Executive shall be entitled to receive the

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excess of (i) the benefits payable in the event of a Termination Without Cause under this Section 6, over (ii) the amount of any benefits payable to Executive under Section 5.

(a)	Early Termination of the Employment Period. Notwithstanding Section 1(b) hereof, the Employment Period shall end upon the earliest to occur of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination Within 180 Days, (iv) a Voluntary Termination After 180 Days, (v) a Termination For Good Reason, (vi) a Termination Due to Retirement, (vii) a Termination Due to Disability, or (viii) a Termination Due to Death.
(b)	Notice of Termination. Communication of termination under this Section 6 shall be made to the other party by Notice of Termination in the case of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination Within 180 Days, (iv) a Voluntary Termination After 180 Days, or (v) a Termination For Good Reason.
(c)	Benefits Payable Upon Termination; Rules for Determining Reason for Termination.

(i)

Benefits Payable Upon Termination. Following the end of the Employment Period, Executive (or, in the event of his death, his surviving spouse, if any, or if none, his estate) shall be paid the type or types of compensation determined to be payable in accordance with the following table, such payment to be made in the form specified in such table and at the time established pursuant to Section 7 hereof. Capitalized terms used in such table (and otherwise in this Section 6) that are defined in Section 5, and not specifically defined in Section 6(d) hereof, shall have the meanings ascribed thereto under Section 5. Where such a capitalized term is defined solely in Section 6(d), or in both Section 5 and Section 6(d), such term shall have the meaning ascribed to it in Section 6(d).

(ii)

Rules for Determining Reason for Termination.

(A) No Termination Without Cause, Voluntary Termination Within 180 Days or Termination For Good Reason shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 6, notwithstanding the fact that, either on, before or after the Date of Termination with respect thereto,(I) Executive was eligible for Retirement as defined in the Savings Plan, (II) Executive requested to be treated as a retiree for purposes of the Savings Plan or any other plan or program of the Company or its affiliates, or (III) Executive or the Company could have terminated Executive’s employment in a Termination Due to Disability hereunder.

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(B)

No Termination Due to Retirement shall be treated as a Voluntary Termination After 180 Days for purposes of this Section 6, notwithstanding the fact that the Date of Termination for such Termination Due to Retirement may occur within 180 days following a Change of Control.

(C)

Notwithstanding any provision in this Agreement to the contrary, in the event of a Change of Control as described in clause (iii) or clause (iv) of the definition of the term change of Control in Section 6(d) of this Agreement, if the employment of Executive involuntarily terminates on or after the date of a shareholder approval described in either of such clauses but before the date of a consummation described in either of such clauses, the date of termination of Executive’s employment shall be deemed for the purposes of this Agreement to be the day following the date of the applicable consummation.

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BENEFITS PAYABLE: CHANGE OF CONTROL

	Accrued	Pro Rata Target	Severance			Vested Benefits	Welfare
BENEFIT	Salary	Bonus	Payment	Equity Awards	Vested Benefits	Enhancement	Benefits Continuation
FORM OF				Determined Under the	Determined Under the		Determined Under the
PAYMENT	Lump Sum	Lump Sum	Lump Sum	Applicable Plan	Applicable Plan	Lump Sum	Applicable Plan
Termination For Cause	Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Without Cause	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination Within 180 Days	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination After 180 Days	Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination For Good Reason	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Termination Due to Retirement	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Disability	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Death	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available

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(d) Definitions.

“Beneficial Owner” means any Person who, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” (within the meaning of Rule 13d-3 under the Securities and Exchange Act of 1934, as amended (the “Act”)) of any securities of a company, including any such right pursuant to any agreement, arrangement or understanding (whether or not in writing), provided that: (i) a Person shall not be deemed the Beneficial Owner of any security as a result of an agreement, arrangement or understanding to vote such security (A) arising solely from a revocable proxy or consent given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the Exchange Act and the applicable rules and regulations thereunder, or (B) made in connection with, or to otherwise participate in, a proxy or consent solicitation made, or to be made, pursuant to, and in accordance with, the applicable provisions of the Exchange Act and the applicable rules and regulations thereunder, in either case described in clause (A) or (B) above, whether or not such agreement, arrangement or understanding is also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); and (ii) a Person engaged in business as an underwriter of securities shall not be deemed to be the Beneficial Owner of any security acquired through such Person’s participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition.

“Change of Control” means:

(i)

a report on Schedule 13D shall be filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Act disclosing that any Person, other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company is the Beneficial Owner of twenty percent or more of the outstanding stock of the Company entitled to vote in the election of directors of the Company;

(ii)

any Person, other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) entitled to vote in the election of directors of the Company for cash, securities or any other consideration, provided that after consummation of the offer, the Person in question is the Beneficial Owner of fifteen percent or more of the outstanding stock of the Company entitled to vote in the election of directors of the Company (calculated as provided in paragraph (d) of Rule 13d-3 under the Act in the case of rights to acquire stock);

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(iii)	any merger, consolidation, recapitalization or reorganization of the Company approved by the stockholders of the Company shall be consummated, other than any such transaction immediately following which the persons who were the Beneficial Owners of the outstanding securities of the Company entitled to vote in the election of directors of the Company immediately prior to such transaction are the Beneficial Owners of at least 55% of the total voting power represented by the securities of the entity surviving such transaction entitled to vote in the election of directors of such entity (or the ultimate parent of such entity) in substantially the same relative proportions as their ownership of the securities of the Company entitled to vote in the election of directors of the Company immediately prior to such transaction; provided that, such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such threshold (or to preserve such relative voting power) is due solely to the acquisition of voting securities by an employee benefit plan of the Company, such surviving entity or any subsidiary of such surviving entity;
(iv)	any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company approved by the stockholders of the Company shall be consummated; or
(v)	within any 24 month period, the persons who were directors of the Company immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to the Company, provided that any director who was not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director (A) was elected to the Board by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually or by prior operation of this clause (v), and (B) was not designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (iii) or (iv) of this definition of the term Change of Control in Section 6(d) of this Agreement.

“Date of Termination” means (i) in the case of a termination of the Employment Period for which a Notice of Termination is required, the date of receipt of such Notice of Termination or, if later, the date specified therein, as the case may be, or (ii) in all other cases, the actual date on which Executive’s employment terminates during the Employment Period.

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“Not Payable” means that a particular benefit shall not be paid or otherwise provided to Executive.

“Notice of Termination” means (i) in the case of a Termination For Cause, a written notice given by the Company to Executive, within 30 calendar days of the Company’s having actual knowledge of the events giving rise to such termination, (ii) in the case of a Termination Without Cause, a written notice given by the Company to Executive at least 30 calendar days before the effective date of such Termination Without Cause, (iii) in the case of a Voluntary Termination Within 180 Days or a Voluntary Termination After 180 Days, a written notice given by Executive to the Company at least 30 calendar days before the effective date of such termination, and (iv) in the case of a Termination For Good Reason, a written notice given by Executive to the Company within 180 days of Executive’s having actual knowledge of the events giving rise to such Termination For Good Reason, and which (A) indicates the specific termination provision in this Agreement relied upon, (B) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (C) if the termination date is other than the date of receipt of such notice, specifies the termination date of this Agreement (which date shall be not more than 15 days after the giving of such notice). The failure by Executive to set forth in such Notice of Termination any fact or circumstance that contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his rights hereunder.

“Payable” means that a particular benefit shall be paid to Executive in the amount, at the time, and in the form specified herein.

“Person” has the meaning ascribed to such term in Section 3(a)(9) of the Act, as supplemented by Section 13(d)(3) of the Act; provided, however, that Person shall not include (i) the Company, any subsidiary of the Company or any other Person controlled by the Company, (ii) any trustee or other fiduciary holding securities under any employee benefit plan of the Company or of any subsidiary of the Company, or (iii) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of securities of the Company.

“Potential Change of Control” means:

(i)	a Person shall commence a tender offer, which if successfully consummated, would result in such Person being the Beneficial Owner of 15% of the stock of the Company entitled to vote in the election of directors of the Company;
(ii)	the Company shall enter into an agreement the consummation of which shall constitute a Change of Control of the Company;

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(iii)	solicitation of proxies for the election of directors of the Company by anyone other than the Company, which, if such directors were elected, would result in the occurrence of a Change of Control described in Section 6(d) of this Agreement; or
(iv)	any other event shall occur which is deemed to be a Potential Change of Control by the Board or the appropriate Committee thereof.

“Severance Payment” means a cash amount equal to three times the sum of (i) Executive’s Base Salary at the rate in effect as of the date on which the Employment Period terminates, and (ii) Executive’s Target Bonus for such year.

“Termination For Cause” means the Company’s termination of Executive’s employment due to (i) Executive’s conviction of a felony; (ii) an act or acts of extreme dishonesty or gross misconduct on Executive’s part which result or are intended to result in material damage to the Company’s business or reputation; or (iii) repeated material violations by Executive of his obligations under Section 2 of this Agreement, which violations are demonstrably willful and deliberate on Executive’s part and which result in material damage to the Company’s business or reputation.

“Termination For Good Reason” means the occurrence of any of the following after the occurrence of a Potential Change of Control or a Change of Control:

(i)	(A)the assignment to Executive of any duties inconsistent in any material adverse respect with Executive’s position, duties, authority or responsibilities as contemplated by Section 2 of this Agreement, or (B) any other material adverse change in such position, including titles, authority or responsibilities;
(ii)	any failure by the Company to comply with any of the provisions of Sections 3 and 4 of this Agreement at a level of least equal to that in effect immediately preceding the Change of Control or a Potential Change of Control, other than an insubstantial or inadvertent failure remedied by the Company promptly after receipt of notice thereof given by Executive;
(iii)	the Company’s requiring Executive to be based at any office or location more than 25 miles from the location at which he performed his services specified under Section 2 hereof immediately prior to the Change of Control or a Potential Change of Control, except for travel reasonably required in the performance of Executive’s responsibilities;
(iv)	any failure by the Company to obtain the assumption and agreement to perform this Agreement by a successor as contemplated by Section 10(d) hereof; or

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(v) any attempt by the Company to terminate the Executive’s employment in a Termination For Cause that is determined in a proceeding pursuant to Section 9 or Section 10 hereof not to constitute a Termination For Cause.

Notwithstanding the foregoing, a termination of Executive’s employment shall not be treated as a Termination For Good Reason (I) if Executive shall have consented in writing to the occurrence of the event giving rise to the claim of Termination For Good Reason, or (II) if Executive shall have delivered a Notice of Termination to the Company, and the facts and circumstances specified therein as providing a basis for such Termination For Good Reason are cured by the Company within 10 days of its receipt of such Notice of Termination.

“Vested Benefits Enhancement” means (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable Federal rate as determined under Section 1274(d) of the Internal Revenue Code of 1986, as amended (the “Code”), of the additional retirement benefits that would have been payable or available to Executive under any ERPs, based on (A) the age and service Executive would have attained or completed had Executive continued in the Company’s employ until the third anniversary of the occurrence of the Change of Control, and (B) where compensation is a relevant factor, his pensionable compensation as of the Date of Termination, such compensation to include, on the same terms as apply to other executives, any Severance Payment made to Executive, (ii) solely for purposes of vesting in any benefits under any ESPs, Executive shall be treated as having continued in the Company’s employ until the third anniversary of the occurrence of such Change of Control, and (iii) solely for purposes of determining eligibility for retiree medical benefits under any retirement plan or any retiree welfare benefit plan, policy or program of the Company or its affiliates, and any ERPs related thereto, Executive shall be treated as having continued in the Company’s employ until the third anniversary of the occurrence of such Change of Control and to have retired on the last day of such period.

“Voluntary Termination Within 180 Days” means a termination of employment by Executive for any reason within the first 180 days following a Change of Control, and “Voluntary Termination After 180 Days” means a termination of employment by Executive other than a Termination For Good Reason, a Termination Due to Disability by Executive, or a Termination Due to Death within the remaining 2 years and 6 months following a Change of Control.

“Welfare Benefits Continuation” shall have the same meaning as that described in Section 5 hereof, except that the entitlement of Executive and/or his dependents to participation in the Welfare Benefit Plans shall continue until the third anniversary of the Date of Termination.

(e) Out-Placement Services. If the Employment Period terminates because of a Termination Without Cause or a Termination For Good Reason, Executive shall be entitled to out-

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placement services, provided by the Company or its designee at the Company’s expense, for 12 months following the Date of Termination, or such lesser period as the Executive may require such services.

(f) Certain Further Payments by Company.

(i)

Tax Reimbursement Payment. In the event that any amount or benefit paid or distributed to Executive pursuant to this Agreement, taken together with any amounts or benefits otherwise paid or distributed to Executive by the Company or any affiliate (collectively, the “Covered Payments”), are or become subject to the tax (the “Excise Tax”) imposed under Section 4999 of the Internal Revenue Code of 1986, as amended, or any similar tax that may hereafter be imposed, the Company shall pay to the Executive at the time specified in this Section an additional amount (the “Tax Reimbursement Payment”) such that the net amount retained by the Executive with respect to such Covered Payments, after deduction of any Excise Tax on the Covered Payments and any Federal, state and local income tax and other tax on the Tax Reimbursement Payment provided for by this Section, but before deduction for any Federal, state or local income or employment tax withholding on such Covered Payments, shall be equal to the amount of the Covered Payments.

(ii)

Applicable Rules. For purposes of determining whether any of the Covered Payments will be subject to the Excise Tax and the amount of such Excise Tax,

(A)

such Covered Payments will be treated as “parachute payments” within the meaning of Section 280G of the Code, and all “parachute payments” in excess of the “base amount” (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the good faith judgment of the Company’s independent certified public accountants appointed prior to the Effective Date or tax counsel selected by such accountants (the “Accountants”), the Company has a reasonable basis to conclude that such Covered Payments (in whole or in part) either do not constitute “parachute payments” or represent reasonable compensation for personal services actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the “base amount,” or such “parachute payments” are otherwise not subject to such Excise Tax, and

(B)

the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Accountants in accordance with the principles of Section 280G of the Code.

(iii) Additional Rules. For purposes of determining the amount of the Tax Reimbursement Payment, the Executive shall be deemed to pay: (A) Federal

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income taxes at the highest applicable marginal rate of Federal income taxation for the calendar year in which the Tax Reimbursement Payment is to be made, and (B) any applicable state and local income and other taxes at the highest applicable marginal rate of taxation for the calendar year in which the Tax Reimbursement Payment is to be made, net of the maximum reduction in Federal incomes taxes which could be obtained from the deduction of such state or local taxes if paid in such year.

(iv) Repayment or Additional Payment in Certain Circumstances.

(A)

Repayment. In the event that the Excise Tax is subsequently determined by the Accountants or pursuant to any proceeding or negotiations with the Internal Revenue Service to be less than the amount taken into account hereunder in calculating the Tax Reimbursement Payment made, Executive shall repay to the Company, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior Tax Reimbursement Payment that would not have been paid if such lesser Excise Tax had been applied in initially calculating such Tax Reimbursement Payment. Notwithstanding the foregoing, in the event any portion of the Tax Reimbursement Payment to be repaid to the Company has been paid to any Federal, state or local tax authority, repayment thereof shall not be required until actual refund or credit of such portion has been made to Executive by the applicable tax authority. Executive and the Company shall mutually agree upon the course of action to be pursued (and the method of allocating the expenses thereof) if Executive’s good faith claim for refund or credit is denied.

(B)

Additional Tax Reimbursement Payment. In the event that the Excise Tax is later determined by the Accountants or pursuant to any proceeding or negotiations with the Internal Revenue Service to exceed the amount taken into account hereunder at the time the Tax Reimbursement Payment is made (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of the Tax Reimbursement Payment), the Company shall make an additional Tax Reimbursement Payment in respect of such excess (plus any interest or penalty payable with respect to such excess) at the time that the amount of such excess is finally determined.

(v) Timing for Tax Reimbursement Payment. The Tax Reimbursement Payment (or portion thereof) provided for in this Section 6 shall be paid to Executive not later than 10 business days following the payment of the Covered Payments; provided,

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however, that if the amount of such Tax Reimbursement Payment (or portion thereof) cannot be finally determined on or before the date on which payment is due, the Company shall pay to Executive by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than 45 calendar days after payment of the related Covered Payment. To the extent that the amount of the estimated Tax Reimbursement Payment exceeds the amount subsequently determined to have been due, Executive shall repay such excess to the Company on the fifth business day after written demand by the Company for payment.

7. Timing of Payments.

Accrued Salary, Severance Payments and Vested Benefits Enhancements shall be paid no later than 10 days following the termination of the Employment Period. Pro-Rata Target Bonus shall be paid as follows: (a) if the Employment Period terminates in the first, second or third calendar quarter of any particular calendar year, then the Pro-Rata Target Bonus shall be paid no later than 10 days following the termination of the Employment Period; or (b) if the Employment Period terminates in the fourth calendar quarter of any particular calendar year, then the Pro-Rata Target Bonus shall be paid no later than the same time as similar awards are paid to other executives participating in the plans or programs under which the awards are paid, but in no event later than March 31 of the calendar year following the end of such fourth calendar quarter. Vested Benefits and Equity Awards shall be paid no later than the time for payment Determined Under the Applicable Plan except as otherwise expressly superseded or modified by this Agreement. Tax Reimbursement Payments shall be paid at the time specified in Section 6 hereof. Notwithstanding the foregoing, solely for purposes of amounts payable pursuant to Section 5 hereof, if any amount payable to Executive pursuant to Section 5 would be nondeductible by the Company under Section 162(m) of the Code if paid in the year of Executive’s termination, the Company shall have the option of paying such nondeductible amount, with interest at the one-year treasury bill rate as in effect on the date of such termination as reported in the Wall Street Journal, on the first day of the second calendar quarter in the year following such termination.

8. Full Discharge of Company Obligations.

Except in the case of amounts payable to executive in the event of a termination of employment following a Potential Change of Control as described in the first paragraph of Section 6, and except as expressly provided in the last sentence of this Section 8, the amounts payable to Executive pursuant to Section 5 following termination of his employment (including amounts payable with respect to Vested Benefits) shall be in full and complete satisfaction of Executive’s rights under Section 5 of this Agreement and any other claims he may have in respect of his

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employment by the Company or any of its affiliates. Such amounts shall constitute liquidated damages with respect to any and all such rights and claims and, upon Executive’s receipt of such amounts, the Company shall be released and discharged from any and all liability to Executive in connection with Section 5 of this Agreement or otherwise in connection with Executive’s employment with the Company and its affiliates. Nothing in this Section 8 shall be construed to release the Company from its obligation to indemnify Executive as provided in Section 4(e) hereof.

9. Noncompetition, Confidentiality and Other Covenants.

By and in consideration of the compensation and benefits to be provided by the Company hereunder, including the severance arrangements set forth herein, Executive agrees to the following:

(a)

Noncompetition. During the Employment Period and until the earlier of: (i) the last day of the one year period following any Voluntary Termination of the Employment Period by Executive pursuant to Section 5 hereof, or (ii) the date a Change of Control occurs (the “Restriction Period”), Executive shall not become associated with any entity, whether as a principal, partner, employee, agent, consultant, shareholder (other than as a holder, or a member of a group which is a holder, of not in excess of 1% of the outstanding voting shares of any publicly traded company) or in any other relationship or capacity, paid or unpaid, that is actively engaged in any geographic area in any business which is in competition with the business of the Company. The Company shall, in its sole discretion, have the right to enforce or waive the terms of this provision in connection with the Restriction Period. If the Company exercises its right to enforce this provision for the Restriction Period, the Company will provide Executive with written notice of its intent to enforce and agrees to pay Executive one year of Executive’s then current Base Salary and one year of Executive’s then current Target Bonus as compensation for the Restriction Period. Executive agrees that the terms of the Restriction Period are reasonable and that this compensation is above and beyond any amounts necessary to support the terms of the Restriction Period a set forth herein. Notwithstanding anything herein to the contrary, the terms of this Section 9(a) shall not apply in the event of any termination of employment following a Change of Control as provided for in Section 6 of this Agreement, including any termination following a potential Change of Control as described in the first paragraph of Section 6.

(b)

Confidentiality. Without the prior written consent of the Company, except to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency, Executive shall not disclose to any third person, or permit the use of for the benefit of any person or any entity other than The Company or its affiliates, any trade secrets, customer lists, information regarding product development, marketing plans, sales plans, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, financial records, or other financial, organizational, commercial, business, sales, marketing, technical, product or employee information

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	relating to the Company or its affiliates or information designated as confidential, proprietary, and/or a trade secret, or any other information relating to the Company or its affiliates that Executive knows from the circumstances, in good faith and good conscience, should be treated as confidential, or any information that the Company or its affiliates may receive belonging to customers, agents or others who do business with the Company or its affiliates, except to the extent that any such information previously has been disclosed to the public by the Company or is in the public domain (other than by reason of Executive’s violation of this Section 9(b)).
(c)	Non-Solicitation of Employees. During the Employment Period and until the earlier of: (i) the last day of the one year period following any Voluntary Termination of the Employment Period by Executive pursuant to Section 5 hereof, or (ii) the date a Change of Control occurs, Executive shall not directly or indirectly solicit, encourage or induce any employee of the Company or its affiliates to terminate employment with such entity, and shall not directly or indirectly, either individually or as owner, agent, employee, consultant or otherwise, employ or offer employment to any person who is or was employed by the Company or an affiliate thereof unless such person shall have ceased to be employed by such entity for a period of at least six months. Notwithstanding anything herein to the contrary, the terms of this Section 9(c) shall not apply in the event of any termination of employment following a Change of Control as provided for in Section 6 of this Agreement, including any termination following a potential Change of Control as described in the first paragraph of Section 6.
(d)	Company Property. Except as expressly provided herein, promptly following any termination of the Employment Period, Executive shall return to the Company all property of the Company, and all copies thereof in Executive’s possession or under his control.
(e)	Injunctive Relief and Other Remedies with Respect to Covenants. Executive acknowledges and agrees that the covenants and obligations of Executive with respect to noncompetition, confidentiality, nonsolicitation, and Company property relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, Executive agrees that the Company (i) shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) restraining Executive from committing any violation of the covenants and obligations contained in this Section 9, and (ii) shall have no further obligation to make any payments to Executive hereunder following any material violation of the covenants and obligations contained in this Section 9. These remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity. In connection with the foregoing provisions of this Section 9, Executive represents that his economic means and circumstances are such that such provisions will not prevent him from providing for himself and his family on a basis satisfactory to him. Notwithstanding the foregoing, in no event shall an asserted violation of the provisions of this Section constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement following a Change of Control.

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10. Miscellaneous.

(a)	Survival. All of the provisions of Sections 5 (relating to termination of the Employment Period prior to a Change of Control), 6 (relating to termination of the Employment Period following a Change of Control or a Potential Change of Control), 9 (relating to noncompetition, confidentiality, nonsolicitation and Company property), 10(b) (relating to arbitration), 10(c) (relating to legal fees) and 10(n) (relating to governing law) of this Agreement shall survive the termination of this Agreement.
(b)	Arbitration. Except as provided in Section 9, any dispute or controversy arising under or in connection with this Agreement shall be resolved by binding arbitration. Such arbitration shall be held in the city of Hartford, Connecticut and except to the extent inconsistent with this Agreement, shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect at the time of the arbitration, and otherwise in accordance with the principles that would be applied by a court of law or equity. The arbitrator shall be acceptable to both the Company and Executive. If the parties cannot agree on an acceptable arbitrator, the dispute or controversy shall be heard by a panel of three arbitrators; one appointed by each of the parties and the third appointed by the other two arbitrators. The Company and Executive further agree that they will abide by and perform any award or awards rendered by the arbitrators and that a judgment may be entered on any award or awards rendered by any state or federal court having jurisdiction over the Company or Executive or any of their respective property.
(c)	Legal Fees and Expenses. In any contest (whether initiated by Executive or by the Company) as to the validity, enforceability or interpretation of any provision of this Agreement, the Company shall pay Executive’s legal expenses (or cause such expenses to be paid) including, without limitation, his reasonable attorney’s fees, on a quarterly basis, upon presentation of proof of such expenses in a form acceptable to the Company, provided that Executive shall reimburse the Company for such amounts, plus simple interest thereon at the 90-day United States Treasury Bill rate as in effect from time to time, compounded annually, if Executive shall not prevail, in whole or in part, as to any material issue as to the validity, enforceability or interpretation of any provision of this Agreement.
(d)	Successors; Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Company and its successors. The Company shall require any successor to all or substantially all of the business and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform the Agreement if no such succession had taken place. This Agreement is personal to the Executive and, without

24

	the prior written consent of the Company, shall not be assignable by Executive otherwise than by will or the law of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.
(e)	Assignment. Except as provided in Section 10(d), neither this Agreement nor any of the rights or obligations hereunder shall be assigned or delegated by any party hereto without the prior written consent of the other party.
(f)	Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the matters referred to herein. This Agreement supersedes and replaces any prior employment or severance agreement or arrangement between the Company and Executive. No other agreement relating to the terms of Executive’s employment by the Company, oral or otherwise, shall be binding between the parties unless it is in writing and signed by the party against whom enforcement is sought. There are no promises, representations, inducements or statements between the parties other than those that are expressly contained herein. Executive acknowledges that he is entering into this Agreement of his own free will and accord, and with no duress, and that he has read this Agreement and that he understands it and its legal consequences.
(g)	Severability; Reformation. In the event that one or more of the provisions of this Agreement shall become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. In the event of a determination that any of the provisions of Section 9(a), Section 9(b) or Section 9(c) are not enforceable in accordance with their terms, Executive and the Company agree that such Section shall be reformed to make such Section enforceable in a manner that provides the Company the maximum rights permitted at law.
(h)	Waiver. Waiver by any party hereto of any breach or default by the other party of any of the terms of this Agreement shall not operate as a waiver of any other breach or default, whether similar to or different from the breach or default waived. No waiver of any provision of this Agreement shall be implied from any course of dealing between the parties hereto or from any failure by either party hereto to assert its or his rights hereunder on any occasion or series of occasions.
(i)	Notices. Any notice required or desired to be delivered under this Agreement shall be in writing and shall be delivered personally, by courier service, by registered mail, return receipt requested, or by telecopy and shall be effective upon actual receipt by the party to which such notice shall be directed, and shall be addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):

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If to the Company:	The Hartford Financial Services Group, Inc.
	Law Department, HO-1-09
	Hartford Plaza
	Hartford, CT 06115
	Attention: Corporate Secretary
With a copy to:	Debevoise & Plimpton
	875 Third Avenue
	New York, NY 10022
	Attn: Lawrence K. Cagney, Esq.
If to Executive:	The home address of Executive
	shown on the records of the Company

(j)	Amendments. This Agreement may not be altered, modified or amended except by a written instrument signed by each of the parties hereto.
(k)	Headings. Headings to provisions of this Agreement are for the convenience of the parties only and are not intended to be part of or to affect the meaning or interpretation hereof.
(l)	Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
(m)	Withholding. Any payments provided for herein shall be reduced by any amounts required to be withheld by the Company from time to time under applicable Federal, State or local income or employment tax laws or similar statutes or other provisions of law then in effect.

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(n) Governing Law. This Agreement shall be governed by the laws of the State of Connecticut, without reference to principles of conflicts or choice of law under which the law of any other jurisdiction would apply.

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EX-10.04

Exhibit 10.04

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT, dated as of March 20, 2001, by and between The Hartford Financial Services Group, Inc., a Delaware corporation (the “Company”), and Neal Wolin (“Executive”).

W I T N E S S E T H:

          WHEREAS, the Company desires that Executive perform substantial services for the Company and to enter into an agreement embodying the terms of such employment (the “Agreement”); and

          WHEREAS, Executive desires to perform such services, enter into such employment and enter into such Agreement;

          NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Company and Executive hereby agree as follows:

1. Employment.

(a) Agreement to Employ. Upon the terms and subject to the conditions of this Agreement, the Company hereby agrees to employ Executive and Executive hereby agrees to commence his employment by the Company.

(b) Term of Employment. Except as otherwise provided below, the Company shall employ Executive for the period commencing on the date first written above (the “Commencement Date”) and ending on the third anniversary of the Commencement Date. At the expiration of the original term or any extended term (each a “Renewal Date”), Executive’s employment hereunder shall be extended automatically, upon the same terms and conditions, for successive one-year periods, unless either party shall give written notice to the other of its intention not to renew such employment at least fifteen months prior to such Renewal Date. Without limiting the generality of the foregoing, upon the occurrence of a Change of Control (as defined below), the term of this Agreement shall be extended automatically without any action by either party until the third anniversary of such Change of Control. Notwithstanding the foregoing, if not previously terminated pursuant to Sections 1(b), 5(a) or 6(a), the term of this Agreement shall terminate on the last day of the month in which Executive attains age 65, and such a termination upon Executive reaching age 65 shall be deemed to be a Termination Due to Retirement for purposes of this Agreement. The period during which Executive is employed pursuant to this Agreement, including any extension thereof in accordance with this Section 1(b), shall be referred to as the “Employment Period.”

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2. Position and Duties.

During the Employment Period, Executive shall serve as Executive Vice President, General Counsel and as a member of the Office of the Chairman of the Company, and/or in such other position or positions with the Company or its affiliates commensurate with his position and experience as the Board of Directors of the Company (the “Board”) shall from time to time specify. During the Employment Period, Executive shall have the duties, responsibilities and obligations customarily assigned to individuals serving in the position or positions in which Executive serves hereunder and such other duties, responsibilities and obligations as the Board or the Chairman shall from time to time specify. Executive shall devote his full time to the services required of him hereunder, except for vacation time and reasonable periods of absence due to sickness, personal injury or other disability, and shall use his best efforts, judgment, skill and energy to perform such services in a manner consonant with the duties of his position and to improve and advance the business and interests of the Company and its affiliates. During the Employment Period, Executive shall comply with the Code of Conduct of the Company. Unless and to the extent inconsistent with the terms of any published Company policy or code of conduct as in effect on the date hereof and as hereafter amended, nothing contained herein shall preclude Executive from (a) serving on the board of directors of any business corporation with the consent of the Board, (b) serving on the board of, or working for, any charitable or community organization, or (c) pursuing his personal financial and legal affairs, so long as the foregoing activities, individually or collectively, do not interfere with the performance of Executive’s duties hereunder or violate any of the provisions of Section 9 hereof.

3. Compensation.

(a) Base Salary. During the Employment Period, the Company shall pay Executive a base salary at the annual rate as in effect on the date hereof. The annual base salary payable under this paragraph shall be reduced, however, to the extent that Executive elects to defer such salary under the terms of any deferred compensation or savings plan or arrangement maintained or established by the Company or its affiliates. The Board or the appropriate committee of the Board may in its discretion periodically review Executive’s base salary in light of competitive practices, the base salaries paid to other executive officers of the Company and the performance of Executive and the Company and its applicable affiliates, and may, in its discretion, increase such base salary by an amount it determines to be appropriate. Any such increase shall not reduce or limit any other obligation of the Company hereunder. Executive’s base salary (as set forth above or as may be increased from time to time) shall not be reduced following any Change of Control, but may be reduced prior to a Change of Control solely pursuant to a cost-saving plan or structural realignment of total compensation elements that includes all senior executives and only to the extent that such reduction is proportionate to the reductions applicable to other senior executives. Executive’s annual base salary payable hereunder, as it may be increased or reduced from time to time as provided herein and without reduction for any amounts deferred as described above, shall be referred to herein as “Base Salary.” The Company shall pay Executive the portion of his Base Salary not deferred not less frequently than in equal monthly installments.

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(b) Annual Bonus. For each calendar year ending during the Employment Period, Executive shall have the opportunity to earn and receive an annual bonus, based on the achievement of target levels of performance, equal to the percentage of his Base Salary used to calculate such annual bonus as of the date hereof. Executive’s annual bonus opportunity may be increased above such percentage from time to time by the Board or the appropriate committee thereof. Executive’s annual bonus opportunity shall not be reduced following any Change of Control, but may be reduced prior to a Change of Control solely pursuant to a cost-saving plan or structural realignment of total compensation elements that includes all senior executives and only to the extent that such reduction is proportionate to the reductions applicable to other senior executives. Executive’s annual bonus opportunity, as it may be increased or reduced from time to time as provided herein, shall be referred to herein as “Target Bonus.” The actual bonus, if any, payable for any such year shall be determined in accordance with the terms of the Company’s Annual Executive Bonus Program or any successor annual incentive plan (the “Annual Plan”) based upon the performance of the Company and/or its applicable affiliates and/or Executive against target objectives established under such Annual Plan. Subject to Executive’s election to defer all or a portion of any annual bonus payable hereunder pursuant to the terms of any deferred compensation or savings plan or arrangement maintained or established by the Company or its affiliates, any annual bonus payable under this Section 3(b) shall be paid to Executive in accordance with the terms of the Annual Plan.

(c) Long-term Incentive Compensation. During the Employment Period, Executive shall participate in all of the Company’s existing and future long-term incentive compensation programs for key executives at a level commensurate with his position with the Company and consistent with the Company’s then current policies and practices, as determined in good faith by the Board or the appropriate committee of the Board.

4. Benefits, Perquisites and Expenses.

(a) Benefits. During the Employment Period, Executive (and, to the extent applicable, his dependents) shall be eligible to participate in or be covered under (i) each welfare benefit plan or program maintained or as hereafter amended or established by the Company or its applicable affiliates, including, without limitation, each group life, hospitalization, medical, dental, health, accident or disability insurance or similar plan or program of thereof that is available to Tier 1 executives, and (ii) each applicable pension, retirement, savings, deferred compensation, stock purchase or other similar plan or program maintained or as hereafter amended or established by the Company or its applicable affiliates, in each case to the extent that Executive is eligible to participate in any such plan or program under the generally applicable provisions thereof. Nothing in this Section 4(a) shall limit the Company’s right to amend or terminate any such plan or program in accordance with the procedures set forth therein or as permitted by applicable law.

(b) Perquisites. For each calendar year during the Employment Period, Executive shall be entitled to at least the number of paid vacation days per year that a Tier 1 Executive is entitled to as of the date hereof, and shall also be entitled to receive such other perquisites as are generally provided to similarly situated Tier 1 executives as of the date hereof or are hereafter provided to other similarly

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situated Tier 1 senior executives of the Company in accordance with the then current policies and practices of the Company.

(c) Business Expenses. During the Employment Period, the Company shall pay or reimburse Executive for all reasonable business expenses incurred or paid by Executive in the performance of Executive’s duties hereunder, upon presentation of expense statements or vouchers and such other information as the Company may require and in accordance with the generally applicable policies and procedures of the Company.

(d) Office and Support Staff. During the Employment Period, Executive shall be entitled to an office with furnishings and other material appointments, and to secretarial and other assistance, at a Tier 1 level and that is at least commensurate to similarly situated executives as of the date hereof or is hereafter provided to other similarly situated senior executives of the Company.

(e) Indemnification. The Company shall indemnify Executive and hold Executive harmless from and against any claim, loss or cause of action, regardless whether asserted during or after the Employment Period, arising from or out of Executive’s performance as an officer, director or employee of the Company or any of its affiliates or in any other capacity, including any fiduciary capacity in which Executive serves at the request of the Company, to the maximum extent permitted by applicable law and under the Certificate of Incorporation and By-Laws of the Company, as may be amended from time to time (the “Governing Documents”), provided that in no event shall the protection afforded to Executive be less than that afforded under the Governing Documents as in effect on the Commencement Date.

5. Termination of Employment.

The provisions of this Section 5 shall apply prior to the occurrence of a Change of Control and, if Executive is still in the Company’s employ, shall again become applicable upon the third anniversary of such Change of Control.

(a) Early Termination of the Employment Period. Notwithstanding Section 1(b) hereof, the Employment Period shall end upon the earliest to occur of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination, (iv) a Termination Due to Retirement, (v) a Termination Due to Disability, or (vi) a Termination Due to Death.

(b) Notice of Termination. Communication of termination under this Section 5 shall be made to the other party by Notice of Termination in the case of (i) a Termination For Cause, (ii) a Termination Without Cause, or (iii) a Voluntary Termination.

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(c) Benefits Payable Upon Termination; Rules for Determining Reason for Termination.

(i) Benefits Payable Upon Termination. Following the end of the Employment Period pursuant to Section 5(a), Executive (or, in the event of his death, his surviving spouse, if any, or if none, his estate) shall be paid the type or types of compensation determined to be payable in accordance with the following table, such payment to be made in the form specified in such table and at the time established pursuant to Section 7 hereof. Capitalized terms used in such table shall have the meanings set forth in Section 5(d) hereof.

(ii) Rules for Determining Reason for Termination.

(A) If a Voluntary Termination occurs on a date that Executive is eligible for Retirement as defined in The Hartford Investment and Savings Plan, as may be amended from time to time, or any successor plan thereof (the “Savings Plan”), such Voluntary Termination shall instead be treated as a Termination Due to Retirement solely for purposes of this Section 5.

(B) No Termination Without Cause shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 5, notwithstanding the fact that, either on, before or after the date of termination of the Employment Period with respect thereto, (I) Executive was eligible for Retirement as defined in the Savings Plan, (II) Executive requested to be treated as a retiree for purposes of the Savings Plan or any other plan or program of the Company or its affiliates, or (III) Executive or the Company could have terminated Executive’s employment in a Termination Due to Disability hereunder.

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BENEFITS PAYABLE : NON-CHANGE OF CONTROL

							Welfare
	Accrued	Pro Rata Target	Severance			Vested Benefits	Benefits
BENEFIT:	Salary	Bonus	Payment	Equity Awards	Vested Benefits	Enhancement	Continuation
FORM OF				Determined Under	Determined Under		Determined Under
PAYMENT:	Lump Sum	Lump Sum	Lump Sum	the Applicable Plan	the Applicable Plan	Lump Sum	the Applicable Plan
Termination For Cause	Payable	Not Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Without Cause	Payable	Payable	Payable	Options /Restricted Stock: Payable Other Equity Awards: Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Due to Retirement	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Disability	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Death	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available

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(d) Definitions.

“Accrued Salary” means any Base Salary earned, but unpaid, for services rendered to the Company on or prior to the date on which the Employment Period ends pursuant to Section 5(a) (other than Base Salary deferred pursuant to Executive’s election, as contemplated by Section 3(a) hereof), plus any vacation pay accrued by Executive as of such date.

“Available” means that the particular benefit shall be made available to Executive to the extent specifically provided herein or required by applicable law.

“Determined Under the Applicable Plan” means that the determination of whether a particular benefit shall or shall not be paid to Executive, and, where specifically required by this Agreement, the timing or form of any benefit payment, shall be made solely by application of the terms of the plan or program providing such benefit, except to the extent that the terms of such plan or program are expressly superseded or modified by this Agreement.

“Equity Awards” means the outstanding stock option, restricted stock, performance share and other equity or long-term incentive compensation awards, if any, held by Executive as of the date of his termination.

“ERPs” means any excess cash balance retirement plans maintained or as hereafter amended or established by the Company or its applicable affiliates.

“ESPs” means any excess investment and savings plans maintained or as hereafter amended or established by the Company or its applicable affiliates.

“Lump Sum” means a single lump sum cash payment.

“Not Available” means that the particular benefit shall be not be made available to Executive, except to the extent required by applicable law.

“Notice of Termination” means (i) in the case of a Termination For Cause, a written notice given by the Company to Executive within 30 calendar days of the Company’s having actual knowledge of the events giving rise to such Termination For Cause, (ii) in the case of a Termination Without Cause, a written notice given by the Company to Executive at least 30 calendar days before the effective date of such Termination Without Cause, and (iii) in the case of a Voluntary Termination, a written notice given by Executive to the Company indicating the effective date of Executive’s termination of the Employment Period in such Voluntary Termination, such effective date to be no earlier than 30 days following the date such notice is received by the Company from Executive.

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“Not Payable” means (i) with respect to benefits other than Equity Awards, such benefits shall not be paid or otherwise provided to Executive, and (ii) with respect to Equity Awards, such Equity Awards, to the extent unvested, unexercisable, or subject to restrictions that have not yet lapsed, shall be forfeited and/or canceled as of the date of termination of the Employment Period, unless otherwise determined by the Board or the appropriate committee of the Board in its discretion.

“Payable” means (i) with respect to benefits other than those described in clause (ii) of this paragraph, such benefits shall be paid to Executive in the amount, at the time, and in the form specified herein, and (ii) with respect to benefits described in this clause (ii), the following shall apply solely in the event of a Termination Without Cause, notwithstanding anything in the applicable plan or program to the contrary: (A) with respect to any outstanding stock options not yet expired as of the date of termination of the Employment Period, Executive shall be treated as though he remained in the employ of the Company for the two year period following such date, and except to the extent that any such options first expire during such period under the applicable plan or program, (I) any such options that would have become vested over such two year period solely by reason of Executive remaining in the employ of the Company during such period shall become immediately vested and nonforfeitable, (II) with respect to any options that by their terms would vest if the stock of the Company or an affiliate were to reach a specified market price, such options shall become vested and nonforfeitable if and when such stock reaches such price during such two year period, and (III) Executive shall have an additional two years to exercise any vested options (beyond the time to exercise such options permitted under the applicable plan or program), and (B) with respect to any restricted stock subject to restrictions that have not yet lapsed as of the date of termination of the Employment Period, such restrictions shall be deemed to have lapsed and such restricted stock shall become immediately vested and nonforfeitable as of such date.

“Pro-Rata Target Bonus” means an amount equal to the product of: (i) an amount equal to the Target Bonus Executive would have been entitled to receive under Section 3(b) for the calendar year in which the Employment Period terminates, and (ii) a fraction (the “Service Fraction”), the numerator of which is equal to the number of rounded months in such calendar year which have elapsed as of the date of such termination, and the denominator of which is 12; provided that, if the Employment Period terminates in the last quarter of any calendar year, the Pro-Rata Target Bonus shall be the amount determined under the above formula or, if greater, the product of: (A) the bonus that would have been paid to Executive based on actual performance for such calendar year, and (B) the Service Fraction.

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“Severance Payment” means an amount equal to two times the sum of: (i) Executive’s Base Salary, and (ii) Executive’s Target Bonus amount under Section 3(b) hereof for the calendar year in which the Employment Period terminates.

“Termination Due to Death” means a termination of Executive’s employment due to the death of Executive.

“Termination Due to Disability” means (i) a termination of Executive’s employment by the Company as a result of a determination by the Board or the appropriate committee thereof that Executive has been incapable of substantially fulfilling the positions, duties, responsibilities and obligations set forth in this Agreement on account of physical, mental or emotional incapacity resulting from injury, sickness or disease for a period of (A) at least four consecutive months, or (B) more than six months in any twelve month period, or (ii) Executive’s termination of employment on account of Disability as defined in The Hartford Investment and Savings Plan, as may be amended from time to time.

“Termination Due to Retirement” means Executive’s termination of employment on account of Executive’s Retirement as defined in The Hartford Investment and Savings Plan, as may be amended from time to time.

“Termination For Cause” means a termination of Executive’s employment by the Company for any of the following reasons: (i) Executive is convicted of or enters a plea of guilty or nolo contendere to a felony, a crime of moral turpitude, dishonesty, breach of trust or unethical business conduct, or any crime involving the business of the Company or its affiliates; (ii) in the performance of his duties hereunder or otherwise to the detriment of the Company or its affiliates, Executive engages in (A) willful misconduct, (B) willful or gross neglect, (C) fraud, (D) misappropriation, (E) embezzlement, or (F) theft; (iii) Executive willfully fails to adhere to the policies and practices of the Company or devote substantially all of his business time and effort to the affairs thereof, or disobeys the directions of the Board to do either of the foregoing; (iv) Executive breaches this Agreement in any material respect; (v) Executive is adjudicated in any civil suit to have committed, or acknowledges in writing or in any agreement or stipulation his commission, of any theft, embezzlement, fraud or other intentional act of dishonesty involving any other person; or (vi) Executive willfully violates the Code of Conduct of the Company. Executive shall be permitted to respond and defend himself before the Board within 30 days after delivery to Executive of written notification of any proposed Termination For Cause that specifies in detail the reasons for such termination. If the majority of the members of the Board (excluding Executive) do not confirm that the Company had grounds for a Termination For Cause within 30 days after Executive has had his hearing before the Board, Executive shall have the option of treating his employment

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as not having terminated or as having been terminated in a Termination Without Cause.

“Termination Without Cause” means any involuntary termination of Executive’s employment by the Company other than a Termination For Cause, a Termination Due to Disability or a Termination Due to Death.

“Vested Benefits” means amounts that are vested or that Executive is otherwise entitled to receive, without the performance by Executive of further services or the resolution of a contingency, under the terms of or in accordance with any investment and savings plan or cash balance retirement plan (including any plan providing retiree medical benefits) of the Company or its affiliates, and any ERPs or ESPs related thereto, and any deferred compensation or employee stock purchase plan or similar plan or program of the Company or its affiliates.

“Vested Benefits Enhancement” means (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable Federal rate as determined under Section 1274(d) of the Internal Revenue Code of 1986, as amended (the “Code”), of the additional retirement benefits that would have been payable or available to Executive under any ERPs, based on (A) the age and service Executive would have attained or completed had Executive continued in the Company’s employ until the second anniversary of the date of termination of the Employment Period, and (B) where compensation is a relevant factor, his pensionable compensation as of such date, such compensation to include, on the same terms as apply to other executives, any Severance Payment made to Executive, and (ii) solely for purposes vesting in any benefits under any ESPs, Executive shall be treated as having continued in the Company’s employ until the second anniversary of the date of termination of the Employment Period.

“Voluntary Termination” means any voluntary termination of Executive’s Employment by Executive pursuant to this Section 5, other than a Termination Due to Retirement or a Termination Due to Disability by Executive.

“Welfare Benefits Continuation” means that until the second anniversary of the date of termination of the Employment Period, Executive and, if applicable, his dependents shall be entitled to continue participation in the life and health insurance benefit plans of the Company or its affiliates in which Executive and/or such dependents were participating as of the date of termination of the Employment Period, and such other welfare benefit plans thereof in which the Company is required by law to permit the participation of Executive and/or his dependents, (collectively, the “Welfare Benefit Plans”). Such participation shall be on the same terms and conditions (including the requirement that Executive pay any premiums generally paid by an employee)

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as would apply if Executive were still in the employ of the Company; provided that the continued participation of Executive and/or his dependents in such Welfare Benefit Plans shall cease on such earlier date as Executive may become eligible for comparable welfare benefits provided by a subsequent employer. To the extent that Welfare Benefits Continuation cannot be provided under the terms of the applicable plan, policy or program, the Company shall provide a comparable benefit under another plan or from the Company’s general assets.

6. Termination Following a Change of Control or Potential Change of Control.

This Section 6 shall apply (instead of Section 5) during the period commencing upon a Change of Control and continuing until the third anniversary thereof; provided that, in the event that Executive’s employment is terminated by the Company in a Termination Without Cause after the occurrence of a Potential Change of Control and a Change of Control occurs within one year following the date of such termination, then solely for purposes of this Agreement, Executive shall be deemed to have remained in the Company’s employ until the occurrence of the Change of Control and thereafter to have then been terminated by the Company in a Termination Without Cause. As a result, Executive shall be entitled to receive the excess of (i) the benefits payable in the event of a Termination Without Cause under this Section 6, over (ii) the amount of any benefits payable to Executive under Section 5.

(a) Early Termination of the Employment Period. Notwithstanding Section 1(b) hereof, the Employment Period shall end upon the earliest to occur of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination Within 180 Days, (iv) a Voluntary Termination After 180 Days, (v) a Termination For Good Reason, (vi) a Termination Due to Retirement, (vii) a Termination Due to Disability, or (viii) a Termination Due to Death.

(b) Notice of Termination. Communication of termination under this Section 6 shall be made to the other party by Notice of Termination in the case of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination Within 180 Days, (iv) a Voluntary Termination After 180 Days, or (v) a Termination For Good Reason.

(c) Benefits Payable Upon Termination; Rules for Determining Reason for Termination.

(i) Benefits Payable Upon Termination.

(A) Following the end of the Employment Period, Executive (or, in the event of his death, his surviving spouse, if any, or if none, his estate) shall be paid the type or types of compensation determined to be payable in accordance with the following table, such payment to be made in the form specified in such table and at the time established pursuant to Section 7 hereof. Capitalized terms used in such table (and otherwise in this Section 6) that are defined in Section 5, and not specifically defined

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in Section 6(d) hereof, shall have the meanings ascribed thereto under Section 5. Where such a capitalized term is defined solely in Section 6(d), or in both Section 5 and Section 6(d), such term shall have the meaning ascribed to it in Section 6(d).

(B) The Company’s obligation to make the payments provided for in this Section 6 and otherwise to perform its obligations under this Section 6 shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Section 6 and such amounts shall not be reduced whether or not Executive obtains other employment.

(ii) Rules for Determining Reason for Termination.

(A) No Termination Without Cause, Voluntary Termination Within 180 Days or Termination For Good Reason shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 6, notwithstanding the fact that, either on, before or after the Date of Termination with respect thereto, (I) Executive was eligible for Retirement as defined in the Savings Plan, (II) Executive requested to be treated as a retiree for purposes of the Savings Plan or any other plan or program of the Company or its affiliates, or (III) Executive or the Company could have terminated Executive’s employment in a Termination Due to Disability hereunder.

(B) No Termination Due to Retirement shall be treated as a Voluntary Termination After 180 Days for purposes of this Section 6, notwithstanding the fact that the Date of Termination for such Termination Due to Retirement may occur within 180 days following a Change of Control.

(C) Notwithstanding any provision in this Agreement to the contrary, in the event of a Change of Control as described in clause (iii) or clause (iv) of the definition of the term Change of Control in Section 6(d) of this Agreement, if the employment of Executive involuntarily terminates on or after the date of a shareholder approval described in either of such clauses but before the date of a consummation described in either of such clauses, the date of termination of Executive’s employment shall be deemed for purposes of this Agreement to be the day following the date of the applicable consummation.

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BENEFITS PAYABLE: CHANGE OF CONTROL

	Accrued	Pro Rata Target	Severance			Vested Benefits	Welfare
BENEFIT	Salary	Bonus	Payment	Equity Awards	Vested Benefits	Enhancement	Benefits Continuation
FORM OF				Determined Under	Determined Under		Determined Under the
PAYMENT	Lump Sum	Lump Sum	Lump Sum	the Applicable Plan	the Applicable Plan	Lump Sum	Applicable Plan
Termination For Cause	Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Without Cause	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination Within 180 Days	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination After 180 Days	Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination For Good Reason	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Termination Due to Retirement	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Disability	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Death	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available

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(d) Definitions.

“Beneficial Owner” means any Person who, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” (within the meaning of Rule 13d-3 under the Securities and Exchange Act of 1934, as amended (the “Act”)) of any securities of a company, including any such right pursuant to any agreement, arrangement or understanding (whether or not in writing), provided that: (i) a Person shall not be deemed the Beneficial Owner of any security as a result of an agreement, arrangement or understanding to vote such security (A) arising solely from a revocable proxy or consent given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the Exchange Act and the applicable rules and regulations thereunder, or (B) made in connection with, or to otherwise participate in, a proxy or consent solicitation made, or to be made, pursuant to, and in accordance with, the applicable provisions of the Exchange Act and the applicable rules and regulations thereunder, in either case described in clause (A) or (B) above, whether or not such agreement, arrangement or understanding is also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); and (ii) a Person engaged in business as an underwriter of securities shall not be deemed to be the Beneficial Owner of any security acquired through such Person’s participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition.

“Change of Control” means:

(i) a report on Schedule 13D shall be filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Act disclosing that any Person, other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company is the Beneficial Owner of twenty percent or more of the outstanding stock of the Company entitled to vote in the election of directors of the Company;

(ii) any Person, other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) entitled to vote in the election of directors of the Company for cash, securities or any other consideration, provided that after consummation of the offer, the Person in question is the Beneficial Owner of fifteen percent or more of the outstanding stock of the Company entitled to vote in the election of directors of the Company (calculated as provided in paragraph (d) of Rule 13d-3 under the Act in the case of rights to acquire stock);

(iii)any merger, consolidation, recapitalization or reorganization of the Company approved by the stockholders of the Company shall be consummated, other than any such transaction immediately following which the persons who were the Beneficial Owners of the outstanding securities of

14

the Company entitled to vote in the election of directors of the Company immediately prior to such transaction are the Beneficial Owners of at least 55% of the total voting power represented by the securities of the entity surviving such transaction entitled to vote in the election of directors of such entity (or the ultimate parent of such entity) in substantially the same relative proportions as their ownership of the securities of the Company entitled to vote in the election of directors of the Company immediately prior to such transaction; provided that, such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such threshold (or to preserve such relative voting power) is due solely to the acquisition of voting securities by an employee benefit plan of the Company, such surviving entity or any subsidiary of such surviving entity:

(iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company approved by the stockholders of the Company shall be consummated; or

(v) within any 24 month period, the persons who were directors of the Company immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to the Company, provided that any director who was not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director (A) was elected to the Board by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually or by prior operation of this clause (v), and (B) was not designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (iii) or (iv) of this definition of the term Change of Control in Section 6(d) of this Agreement.

“Date of Termination” means (i) in the case of a termination of the Employment Period for which a Notice of Termination is required, the date of receipt of such Notice of Termination or, if later, the date specified therein, as the case may be, or (ii) in all other cases, the actual date on which Executive’s employment terminates during the Employment Period.

“Not Payable” means that a particular benefit shall not be paid or otherwise provided to Executive.

“Notice of Termination” means (i) in the case of a Termination For Cause, a written notice given by the Company to Executive, within 30 calendar days of the Company’s having actual knowledge of the events giving rise to such termination, (ii) in the case of a Termination Without Cause, a written notice given by the Company to Executive at least 30 calendar days before the effective date of such Termination Without Cause, (iii) in the case of a Voluntary Termination Within 180 Days or a Voluntary Termination After 180 Days, a written notice given by Executive to the Company at

15

least 30 calendar days before the effective date of such termination, and (iv) in the case of a Termination For Good Reason, a written notice given by Executive to the Company within 180 days of Executive’s having actual knowledge of the events giving rise to such Termination For Good Reason, and which (A) indicates the specific termination provision in this Agreement relied upon, (B) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (C) if the termination date is other than the date of receipt of such notice, specifies the termination date of this Agreement (which date shall be not more than 15 days after the giving of such notice). The failure by Executive to set forth in such Notice of Termination any fact or circumstance that contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his rights hereunder.

“Payable” means that a particular benefit shall be paid to Executive in the amount, at the time, and in the form specified herein.

“Person” has the meaning ascribed to such term in Section 3(a)(9) of the Act, as supplemented by Section 13(d)(3) of the Act; provided, however, that Person shall not include (i) the Company, any subsidiary of the Company or any other Person controlled by the Company, (ii) any trustee or other fiduciary holding securities under any employee benefit plan of the Company or of any subsidiary of the Company, or (iii) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of securities of the Company.

“Potential Change of Control” means:

(i) a Person shall commence a tender offer, which if successfully consummated, would result in such Person being the beneficial owner of at least 15% of the stock of the Company entitled to vote in the election of directors of the Company;

(ii) the Company shall enter into an agreement the consummation of which shall constitute a Change of Control of the Company;

(iii) solicitation of proxies for the election of directors of the Company by anyone other than the Company, which, if such directors were elected, would result in the occurrence of a Change of Control described in Section 6(d) of this Agreement; or

(iv) any other event shall occur which is deemed to be a Potential Change of Control by the Board or the appropriate Committee thereof.

“Severance Payment” means a cash amount equal to three times the sum of (i) Executive’s Base Salary at the rate in effect as of the date on which the Employment Period terminates, and (ii) Executive’s Target Bonus for such year.

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“Termination For Cause” means the Company’s termination of Executive’s employment due to (i) Executive’s conviction of a felony; (ii) an act or acts of extreme dishonesty or gross misconduct on Executive’s part which result or are intended to result in material damage to the Company’s business or reputation; or (iii) repeated material violations by Executive of his obligations under Section 2 of this Agreement, which violations are demonstrably willful and deliberate on Executive’s part and which result in material damage to the Company’s business or reputation. Executive shall be permitted to respond and defend himself before the Board within 30 days after delivery to Executive of written notification of any proposed Termination for Cause which specifies in detail the reasons for such termination. If the majority of the members of the Board (excluding Executive) do not confirm that the Company had grounds for a Termination For Cause within 30 days after Executive has had his hearing before the Board, Executive shall have the option of treating his employment as not having terminated or as having been terminated pursuant to a Termination Without Cause.

“Termination For Good Reason” means the occurrence of any of the following after the occurrence of a Potential Change of Control or a Change of Control:

(i) (A) the assignment to Executive of any duties inconsistent in any material adverse respect with Executive’s position, duties, authority or responsibilities as contemplated by Section 2 of this Agreement, or (B) any other material adverse change in such position, including titles, authority or responsibilities;

(ii) any failure by the Company to comply with any of the provisions of Sections 3 and 4 of this Agreement at a level of least equal to that in effect immediately preceding the Change of Control or a Potential Change of Control, other than an insubstantial or inadvertent failure remedied by the Company promptly after receipt of notice thereof given by Executive;

(iii) the Company’s requiring Executive to be based at any office or location more than 25 miles from the location at which he performed his services specified under Section 2 hereof immediately prior to the Change of Control or a Potential Change of Control, except for travel reasonably required in the performance of Executive’s responsibilities;

(iv) any failure by the Company to obtain the assumption and agreement to perform this Agreement by a successor as contemplated by Section 10(d) hereof; or

(v) any attempt by the Company to terminate the Executive’s employment in a Termination For Cause that is determined by the Board pursuant to Section 5(c) hereof, or in a proceeding pursuant to Section 9 or Section 10 hereof, not to constitute a Termination For Cause.

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Notwithstanding the foregoing, a termination of Executive’s employment shall not be treated as a Termination For Good Reason (I) if Executive shall have consented in writing to the occurrence of the event giving rise to the claim of Termination For Good Reason, or (II) if Executive shall have delivered a Notice of Termination to the Company, and the facts and circumstances specified therein as providing a basis for such Termination For Good Reason are cured by the Company within 10 days of its receipt of such Notice of Termination.

“Vested Benefits Enhancement” means (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable Federal rate as determined under Section 1274(d) of the Internal Revenue Code of 1986, as amended (the “Code”), of the additional retirement benefits that would have been payable or available to Executive under any ERPs, based on (A) the age and service Executive would have attained or completed had Executive continued in the Company’s employ until the third anniversary of the occurrence of the Change of Control, and (B) where compensation is a relevant factor, his pensionable compensation as of the Date of Termination, such compensation to include, on the same terms as apply to other executives, any Severance Payment made to Executive, (ii) solely for purposes of vesting in any benefits under any ESPs, Executive shall be treated as having continued in the Company’s employ until the third anniversary of the occurrence of such Change of Control, and (iii) solely for purposes of determining eligibility for retiree medical benefits under any retirement plan or any retiree welfare benefit plan, policy or program of the Company or its affiliates, and any ERPs related thereto, Executive shall be treated as having continued in the Company’s employ until the third anniversary of the occurrence of such Change of Control and to have retired on the last day of such period.

“Voluntary Termination Within 180 Days” means a termination of employment by Executive for any reason within the first 180 days following a Change of Control, and

“Voluntary Termination After 180 Days” means a termination of employment by Executive other than a Termination For Good Reason, a Termination Due to Disability by Executive, or a Termination Due to Death within the remaining 2 years and 6 months following a Change of Control.

“Welfare Benefits Continuation” shall have the same meaning as that described in Section 5 hereof, except that the entitlement of Executive and/or his dependents to participation in the Welfare Benefit Plans shall continue until the third anniversary of the Date of Termination.

(e) Out-Placement Services. If the Employment Period terminates because of a Termination Without Cause or a Termination For Good Reason, Executive shall be entitled to out-placement services, provided by the Company or its designee at the Company’s expense, for 12 months following the Date of Termination, or such lesser period as the Executive may require such services.

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(f) Certain Further Payments by Company.

(i) Tax Reimbursement Payment. In the event that any amount or benefit paid or distributed to Executive pursuant to this Agreement, taken together with any amounts or benefits otherwise paid or distributed to Executive by the Company or any affiliate (collectively, the “Covered Payments”), are or become subject to the tax (the “Excise Tax”) imposed under Section 4999 of the Internal Revenue Code of 1986, as amended, or any similar tax that may hereafter be imposed, the Company shall pay to the Executive at the time specified in this Section an additional amount (the “Tax Reimbursement Payment”) such that the net amount retained by the Executive with respect to such Covered Payments, after deduction of any Excise Tax on the Covered Payments and any Federal, state and local income tax and other tax on the Tax Reimbursement Payment provided for by this Section, but before deduction for any Federal, state or local income or employment tax withholding on such Covered Payments, shall be equal to the amount of the Covered Payments.

(ii) Applicable Rules. For purposes of determining whether any of the Covered Payments will be subject to the Excise Tax and the amount of such Excise Tax,

(A) such Covered Payments will be treated as “parachute payments” within the meaning of Section 280G of the Code, and all “parachute payments” in excess of the “base amount” (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the good faith judgment of the Company’s independent certified public accountants appointed prior to the Effective Date or tax counsel selected by such accountants (the “Accountants”), the Company has a reasonable basis to conclude that such Covered Payments (in whole or in part) either do not constitute “parachute payments” or represent reasonable compensation for personal services actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the “base amount,” or such “parachute payments” are otherwise not subject to such Excise Tax, and

(B) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Accountants in accordance with the principles of Section 280G of the Code.

(iii) Additional Rules. For purposes of determining the amount of the Tax Reimbursement Payment, the Executive shall be deemed to pay: (A) Federal income taxes at the highest applicable marginal rate of Federal income taxation for the calendar year in which the Tax Reimbursement Payment is to be made, and (B) any applicable state and local income and other taxes at the highest applicable marginal rate of taxation for the calendar year in which the Tax Reimbursement Payment is to be made, net of the maximum reduction in Federal incomes taxes which could be obtained from the deduction of such state or local taxes if paid in such year.

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(iv) Repayment or Additional Payment in Certain Circumstances.

(A) Repayment. In the event that the Excise Tax is subsequently determined by the Accountants or pursuant to any proceeding or negotiations with the Internal Revenue Service to be less than the amount taken into account hereunder in calculating the Tax Reimbursement Payment made, Executive shall repay to the Company, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior Tax Reimbursement Payment that would not have been paid if such lesser Excise Tax had been applied in initially calculating such Tax Reimbursement Payment. Notwithstanding the foregoing, in the event any portion of the Tax Reimbursement Payment to be repaid to the Company has been paid to any Federal, state or local tax authority, repayment thereof shall not be required until actual refund or credit of such portion has been made to Executive by the applicable tax authority. Executive and the Company shall mutually agree upon the course of action to be pursued (and the method of allocating the expenses thereof) if Executive’s good faith claim for refund or credit is denied.

(B) Additional Tax Reimbursement Payment. In the event that the Excise Tax is later determined by the Accountants or pursuant to any proceeding or negotiations with the Internal Revenue Service to exceed the amount taken into account hereunder at the time the Tax Reimbursement Payment is made (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of the Tax Reimbursement Payment), the Company shall make an additional Tax Reimbursement Payment in respect of such excess (plus any interest or penalty payable with respect to such excess) at the time that the amount of such excess is finally determined.

(v) Timing for Tax Reimbursement Payment. The Tax Reimbursement Payment (or portion thereof) provided for in this Section 6 shall be paid to Executive not later than 10 business days following the payment of the Covered Payments; provided, however, that if the amount of such Tax Reimbursement Payment (or portion thereof) cannot be finally determined on or before the date on which payment is due, the Company shall pay to Executive by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than 45 calendar days after payment of the related Covered Payment. To the extent that the amount of the estimated Tax Reimbursement Payment exceeds the amount subsequently determined to have been due, Executive shall repay such excess to the Company on the fifth business day after written demand by the Company for payment.

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7. Timing of Payments.

Accrued Salary, Severance Payments and Vested Benefits Enhancements shall be paid no later than 10 days following the termination of the Employment Period. Pro-Rata Target Bonus shall be paid as follows: (a) if the Employment Period terminates in the first, second or third calendar quarter of any particular calendar year, then the Pro-Rata Target Bonus shall be paid no later than 10 days following the termination of the Employment Period; or (b) if the Employment Period terminates in the fourth calendar quarter of any particular calendar year, then the Pro-Rata Target Bonus shall be paid no later than the same time as similar awards are paid to other executives participating in the plans or programs under which the awards are paid, but in no event later than March 31 of the calendar year following the end of such fourth calendar quarter. Vested Benefits and Equity Awards shall be paid no later than the time for payment Determined Under the Applicable Plan except as otherwise expressly superseded or modified by this Agreement. Tax Reimbursement Payments shall be paid at the time specified in Section 6 hereof. Notwithstanding the foregoing, solely for purposes of amounts payable pursuant to Section 5 hereof, if any amount payable to Executive pursuant to Section 5 would be nondeductible by the Company under Section 162(m) of the Code if paid in the year of Executive’s termination, the Company shall have the option of paying such nondeductible amount, with interest at the one-year treasury bill rate as in effect on the date of such termination as reported in the Wall Street Journal, on the first day of the second calendar quarter in the year following such termination.

8. Full Discharge of Company Obligations.

Except in the case of amounts payable to Executive in the event of a termination of employment following a Potential Change of Control as described in the first paragraph of Section 6, and except as expressly provided in the last sentence of this Section 8, the amounts payable to Executive pursuant to Section 5 following termination of his employment (including amounts payable with respect to Vested Benefits) shall be in full and complete satisfaction of Executive’s rights under Section 5 of this Agreement and any other claims he may have in respect of his employment by the Company or any of its affiliates. Such amounts shall constitute liquidated damages with respect to any and all such rights and claims and, upon Executive’s receipt of such amounts, the Company shall be released and discharged from any and all liability to Executive in connection with Section 5 of this Agreement or otherwise in connection with Executive’s employment with the Company and its affiliates. Nothing in this Section 8 shall be construed to release the Company from its obligation to indemnify Executive as provided in Section 4(e) hereof.

9. Noncompetition, Confidentiality and Other Covenants.

By and in consideration of the compensation and benefits to be provided by the Company hereunder, including the severance arrangements set forth herein, Executive agrees to the following:

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(a) Noncompetition. During the Employment Period and until the earlier of: (i) the last day of the one year period following any Voluntary Termination of the Employment Period by Executive pursuant to Section 5 hereof, or (ii) the date a Change of Control occurs (the “Restriction Period”), Executive shall not engage in competition with The Hartford. For purposes of this term, “Competition” is defined as: (1) your direct and/or indirect participation in the calling upon, soliciting business, or providing property and casualty or life insurance products to any person or entity who at the time of your termination from the Company is a current customer or client of The Hartford; and (2) your direct and/or indirect participation with regard to inducing or attempting to induce any agency, broker, broker-dealer, financial planner or supplier of The Hartford to terminate their Hartford agency contract with The Hartford. Notwithstanding anything herein to the contrary, the terms of this Section 9(a) shall not apply in the event of any termination of employment following a Change of Control as provided for in Section 6 of this Agreement, including any termination following a potential Change of Control as described in the first paragraph of Section 6.

(b) Confidentiality. Without the prior written consent of the Company, except to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency, Executive shall not disclose to any third person, or permit the use of for the benefit of any person or any entity other than The Company or its affiliates, any trade secrets, customer lists, information regarding product development, marketing plans, sales plans, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, financial records, or other financial, organizational, commercial, business, sales, marketing, technical, product or employee information relating to the Company or its affiliates or information designated as confidential, proprietary, and/or a trade secret, or any other information relating to the Company or its affiliates that Executive knows from the circumstances, in good faith and good conscience, should be treated as confidential, or any information that the Company or its affiliates may receive belonging to customers, agents or others who do business with the Company or its affiliates, except to the extent that any such information previously has been disclosed to the public by the Company or is in the public domain (other than by reason of Executive’s violation of this Section 9(b)).

(c) Non-Solicitation of Employees. During the Employment Period and until the earlier of: (i) the last day of the one year period following any Voluntary Termination of the Employment Period by Executive pursuant to Section 5 hereof, or (ii) the date a Change of Control occurs, Executive shall not directly or indirectly solicit, encourage or induce any employee of the Company or its affiliates to terminate employment with such entity, and shall not directly or indirectly, either individually or as owner, agent, employee, consultant or otherwise, employ or offer employment to any person who is or was employed by the Company or an affiliate thereof unless such person shall have ceased to be employed by such entity for a period of at least six months. Notwithstanding anything herein to the contrary, the terms of this Section

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9(c) shall not apply in the event of any termination of employment following a Change of Control as provided for in Section 6 of this Agreement, including any termination following a potential Change of Control as described in the first paragraph of Section 6.

(d) Company Property. Except as expressly provided herein, promptly following any termination of the Employment Period, Executive shall return to the Company all property of the Company, and all copies thereof in Executive’s possession or under his control.

(e) Injunctive Relief and Other Remedies with Respect to Covenants. Executive acknowledges and agrees that the covenants and obligations of Executive with respect to noncompetition, confidentiality, nonsolicitation, and Company property relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, Executive agrees that the Company (i) shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) restraining Executive from committing any violation of the covenants and obligations contained in this Section 9, and (ii) shall have no further obligation to pay unearned compensation, incentive awards, unvested awards, or bonus payments to Executive hereunder following any material violation of the covenants and obligations contained in this Section 9. These remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity. In connection with the foregoing provisions of this Section 9, Executive represents that his economic means and circumstances are such that such provisions will not prevent him from providing for himself and his family on a basis satisfactory to him. Notwithstanding the foregoing, in no event shall an asserted violation of the provisions of this Section constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement following a Change of Control.

     10. Miscellaneous.

(a) Survival. All of the provisions of Sections 5 (relating to termination of the Employment Period prior to a Change of Control), 6 (relating to termination of the Employment Period following a Change of Control or a Potential Change of Control), 9 (relating to noncompetition, confidentiality, nonsolicitation and Company property), 10(b) (relating to arbitration), 10(c) (relating to legal fees) and 10(n) (relating to governing law) of this Agreement shall survive the termination of this Agreement.

(b) Arbitration. Except as provided in Section 9, any dispute or controversy arising under or in connection with this Agreement shall be resolved by binding arbitration. Such arbitration shall be held in the city of Hartford, Connecticut and except to the extent inconsistent with this Agreement, shall be conducted in accordance with the

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Commercial Arbitration Rules of the American Arbitration Association in effect at the time of the arbitration, and otherwise in accordance with the principles that would be applied by a court of law or equity. The arbitrator shall be acceptable to both the Company and Executive. If the parties cannot agree on an acceptable arbitrator, the dispute or controversy shall be heard by a panel of three arbitrators; one appointed by each of the parties and the third appointed by the other two arbitrators. The Company and Executive further agree that they will abide by and perform any award or awards rendered by the arbitrators and that a judgment may be entered on any award or awards rendered by any state or federal court having jurisdiction over the Company or Executive or any of their respective property.

(c) Legal Fees and Expenses. In any contest (whether initiated by Executive or by the Company) as to the validity, enforceability or interpretation of any provision of this Agreement, the Company shall pay Executive’s legal expenses (or cause such expenses to be paid) including, without limitation, his reasonable attorney’s fees, on a quarterly basis, upon presentation of proof of such expenses in a form acceptable to the Company, provided that Executive shall reimburse the Company for such amounts, plus simple interest thereon at the 90-day United States Treasury Bill rate as in effect from time to time, compounded annually, if Executive shall not prevail, in whole or in part, as to any material issue as to the validity, enforceability or interpretation of any provision of this Agreement.

(d) Successors; Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Company and its successors. The Company shall require any successor to all or substantially all of the business and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform the Agreement if no such succession had taken place. This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by Executive otherwise than by will or the law of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

(e) Assignment. Except as provided in Section 10(d), neither this Agreement nor any of the rights or obligations hereunder shall be assigned or delegated by any party hereto without the prior written consent of the other party.

(f) Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the matters referred to herein. This Agreement supersedes and replaces any prior employment or severance agreement or arrangement between the Company and Executive. No other agreement relating to the terms of Executive’s employment by the Company, oral or otherwise, shall be binding between the parties unless it is in writing and signed by the party against whom enforcement is sought. There are no promises, representations, inducements or

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statements between the parties other than those that are expressly contained herein. Executive acknowledges that he is entering into this Agreement of his own free will and accord, and with no duress, and that he has read this Agreement and that he understands it and its legal consequences.

(g) Severability; Reformation. In the event that one or more of the provisions of this Agreement shall become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. In the event of a determination that any of the provisions of Section 9(a), Section 9(b) or Section 9(c) are not enforceable in accordance with their terms, Executive and the Company agree that such Section shall be reformed to make such Section enforceable in a manner that provides the Company the maximum rights permitted at law.

(h) Waiver. Waiver by any party hereto of any breach or default by the other party of any of the terms of this Agreement shall not operate as a waiver of any other breach or default, whether similar to or different from the breach or default waived. No waiver of any provision of this Agreement shall be implied from any course of dealing between the parties hereto or from any failure by either party hereto to assert its or his rights hereunder on any occasion or series of occasions.

(i) Notices. Any notice required or desired to be delivered under this Agreement shall be in writing and shall be delivered personally, by courier service, by registered mail, return receipt requested, or by telecopy and shall be effective upon actual receipt by the party to which such notice shall be directed, and shall be addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):

If to the Company:	The Hartford Financial Services Group, Inc. Law Department, HO-1-09 Hartford Plaza Hartford, CT 06115 Attention: Corporate Secretary
with a copy to:	Debevoise & Plimpton 875 Third Avenue New York, NY 10022 Attn: Lawrence K. Cagney, Esq.
If to Executive:	The home address of Executive shown on the records of the Company

(j) Amendments. This Agreement may not be altered, modified or amended except by a written instrument signed by each of the parties hereto.

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(k) Headings. Headings to provisions of this Agreement are for the convenience of the parties only and are not intended to be part of or to affect the meaning or interpretation hereof.

(l) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(m) Withholding. Any payments provided for herein shall be reduced by any amounts required to be withheld by the Company from time to time under applicable Federal, State or local income or employment tax laws or similar statutes or other provisions of law then in effect.

(n) Governing Law. This Agreement shall be governed by the laws of the State of Connecticut, without reference to principles of conflicts or choice of law under which the law of any other jurisdiction would apply.

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EX-10.05

Exhibit 10.05

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT, dated as of April 26, 2001, by and between The Hartford Financial Services Group, Inc., a Delaware corporation (the “Company”), and David M. Johnson (“Executive”).

W I T N E S S E T H:

          WHEREAS, the Company desires that Executive perform substantial services for the Company and to enter into an agreement embodying the terms of such employment (the “Agreement”); and

          WHEREAS, Executive desires to perform such services, enter into such employment and enter into such Agreement;

          NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Company and Executive hereby agree as follows:

1. Employment.

(a) Agreement to Employ. Upon the terms and subject to the conditions of this Agreement, the Company hereby agrees to employ Executive and Executive hereby agrees to his employment by the Company.

(b) Term of Employment. Except as otherwise provided below, the Company shall employ Executive for the period commencing on May 1, 2001 (the “Commencement Date”) and ending on the third anniversary of the Commencement Date. At the expiration of the original term or any extended term (each a “Renewal Date”), Executive’s employment hereunder shall be extended automatically, upon the same terms and conditions, for successive one-year periods, unless either party shall give written notice to the other of its intention not to renew such employment at least fifteen months prior to such Renewal Date. Without limiting the generality of the foregoing, upon the occurrence of a Change of Control (as defined below), the term of this Agreement shall be extended automatically without any action by either party until the third anniversary of such Change of Control. Notwithstanding the foregoing, if not previously terminated pursuant to Sections 1(b), 5(a) or 6(a), the term of this Agreement shall terminate on the last day of the month in which Executive attains age 65, and such a termination upon Executive reaching age 65 shall be deemed to be a Termination Due to Retirement for purposes of this Agreement. The period during which Executive is employed pursuant to this Agreement, including any extension thereof in accordance with this Section 1(b), shall be referred to as the “Employment Period.”

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2. Position and Duties.

During the Employment Period, Executive shall serve as Executive Vice President and Chief Financial Officer and as a member of the Office of the Chairman of the Company, and in such other position or positions with the Company or its affiliates commensurate with such position and his experience as the Board of Directors of the Company (the “Board”) shall from time to time specify. During the Employment Period, Executive shall have the duties, responsibilities and obligations customarily assigned to individuals serving in the position or positions in which Executive serves hereunder and such other duties, responsibilities and obligations as the Board shall from time to time specify commensurate with such positions. Executive shall devote his full time to the services required of him hereunder, except for vacation time and reasonable periods of absence due to sickness, personal injury or other disability, and shall use his best efforts, judgment, skill and energy to perform such services in a manner consonant with the duties of his position and to improve and advance the business and interests of the Company and its affiliates. During the Employment Period, Executive shall comply with the Code of Corporate Conduct of the Company. Unless and to the extent inconsistent with the terms of any published Company policy or code of conduct as in effect on the date hereof and as hereafter amended, nothing contained herein shall preclude Executive from (a) serving on the board of directors of any business corporation with the consent of the Board, (b) serving on the board of, or working for, any charitable or community organization, or (c) pursuing his personal financial and legal affairs, so long as the foregoing activities, individually or collectively, do not interfere with the performance of Executive’s duties hereunder or violate any of the provisions of Section 9 hereof.

3. Compensation.

(a) Base Salary. During the Employment Period, the Company shall pay Executive a base salary at the annual rate as in effect on the date hereof. The annual base salary payable under this paragraph shall be reduced, however, to the extent that Executive elects to defer such salary under the terms of any deferred compensation or savings plan or arrangement maintained or established by the Company or its affiliates. The Board or the appropriate committee of the Board may in its discretion periodically review Executive’s base salary in light of competitive practices, the base salaries paid to other executive officers of the Company and the performance of Executive and the Company and its applicable affiliates, and may, in its discretion, increase such base salary by an amount it determines to be appropriate. Any such increase shall not reduce or limit any other obligation of the Company hereunder. Executive’s base salary (as set forth above or as may be increased from time to time) shall not be reduced following any Change of Control, but may be reduced prior to a Change of Control solely pursuant to a cost-saving plan or structural realignment of total compensation elements that includes all senior executives and only to the extent that such reduction is proportionate to the reductions applicable to other senior executives. Executive’s annual base salary payable hereunder, as it may be increased or reduced from time to time as provided herein and without reduction for any amounts deferred as described above, shall be referred to herein as “Base Salary.” The Company shall pay Executive the portion of his Base Salary not deferred not less frequently than in equal monthly installments.

(b) Annual Bonus. For each calendar year ending during the Employment Period, Executive shall have the opportunity to earn and receive an annual bonus, based on the achievement of target levels of

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performance, equal to the percentage of his Base Salary used to calculate such annual bonus as of the date hereof. Executive’s annual bonus opportunity may be increased above such percentage from time to time by the Board or the appropriate committee thereof. Executive’s annual bonus opportunity shall not be reduced following any Change of Control, but may be reduced prior to a Change of Control solely pursuant to a cost-saving plan or structural realignment of total compensation elements that includes all senior executives and only to the extent that such reduction is proportionate to the reductions applicable to other senior executives. Executive’s annual bonus opportunity, as it may be increased or reduced from time to time as provided herein, shall be referred to herein as “Target Bonus.” The actual bonus, if any, payable for any such year shall be determined in accordance with the terms of the Company’s Annual Executive Bonus Program or any successor annual incentive plan (the “Annual Plan”) based upon the performance of the Company and/or its applicable affiliates and/or Executive against target objectives established under such Annual Plan. Subject to Executive’s election to defer all or a portion of any annual bonus payable hereunder pursuant to the terms of any deferred compensation or savings plan or arrangement maintained or established by the Company or its affiliates, any annual bonus payable under this Section 3(b) shall be paid to Executive in accordance with the terms of the Annual Plan.

(c) Long-term Incentive Compensation. During the Employment Period, Executive shall participate in all of the Company’s existing and future long-term incentive compensation programs for key executives at a level commensurate with his position with the Company and consistent with the Company’s then current policies and practices, as determined in good faith by the Board or the appropriate committee of the Board.

4. Benefits, Perquisites and Expenses.

(a) Benefits. During the Employment Period, Executive (and, to the extent applicable, his dependents) shall be eligible to participate in or be covered under (i) each welfare benefit plan or program maintained or as hereafter amended or established by the Company or its applicable affiliates, including, without limitation, each group life, hospitalization, medical, dental, health, accident or disability insurance or similar plan or program of thereof, and (ii) each applicable pension, retirement, savings, deferred compensation, stock purchase or other similar plan or program maintained or as hereafter amended or established by the Company or its applicable affiliates, in each case to the extent that Executive is eligible to participate in any such plan or program under the generally applicable provisions thereof. Nothing in this Section 4(a) shall limit the Company’s right to amend or terminate any such plan or program in accordance with the procedures set forth therein or as permitted by applicable law.

(b) Perquisites. For each calendar year during the Employment Period, Executive shall be entitled to at least the number of paid vacation days per year that Executive is entitled to as of the date

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hereof, and shall also be entitled to receive such other perquisites as are generally provided to him as of the date hereof or are hereafter provided to other similarly situated senior executives of the Company in accordance with the then current policies and practices of the Company.

(c) Business Expenses. During the Employment Period, the Company shall pay or reimburse Executive for all reasonable business expenses incurred or paid by Executive in the performance of Executive’s duties hereunder, upon presentation of expense statements or vouchers and such other information as the Company may require and in accordance with the generally applicable policies and procedures of the Company.

(d) Office and Support Staff. During the Employment Period, Executive shall be entitled to an office with furnishings and other material appointments, and to secretarial and other assistance, at a level that is at least commensurate with the foregoing provided to him as of the date hereof or is hereafter provided to other similarly situated senior executives of the Company.

(e) Indemnification. The Company shall indemnify Executive and hold Executive harmless from and against any claim, loss or cause of action, regardless whether asserted during or after the Employment Period, arising from or out of Executive’s performance as an officer, director or employee of the Company or any of its affiliates or in any other capacity, including any fiduciary capacity, in which Executive serves at the request of the Company, to the maximum extent permitted by applicable law and under the Certificate of Incorporation and By-Laws of the Company, as may be amended from time to time (the “Governing Documents”), whichever is greater, provided that in no event shall the protection afforded to Executive be less than that afforded under the Governing Documents as in effect on the Commencement Date.

5. Termination of Employment.

The provisions of this Section 5 shall apply prior to the occurrence of a Change of Control and, if Executive is still in the Company’s employ, shall again become applicable upon the third anniversary of such Change of Control.

(a) Early Termination of the Employment Period. Notwithstanding Section 1(b) hereof, the Employment Period shall end upon the earliest to occur of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination, (iv) a Termination Due to Retirement, (v) a Termination Due to Disability, or (vi) a Termination Due to Death.

(b) Notice of Termination. Communication of termination under this Section 5 shall be made to the other party by Notice of Termination in the case of (i) a Termination For Cause, (ii) a Termination Without Cause, or (iii) a Voluntary Termination.

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(c) Benefits Payable Upon Termination; Rules for Determining Reason for Termination.

(i) Benefits Payable Upon Termination. Following the end of the Employment Period pursuant to Section 5(a), Executive (or, in the event of his death, his surviving spouse, if any, or if none, his estate) shall be paid the type or types of compensation determined to be payable in accordance with the following table, such payment to be made in the form specified in such table and at the time established pursuant to Section 7 hereof. Capitalized terms used in such table shall have the meanings set forth in Section 5(d) hereof.

(ii) Rules for Determining Reason for Termination.

(A) If a Voluntary Termination occurs on a date that Executive is eligible for Retirement as defined in The Hartford Investment and Savings Plan, as may be amended from time to time, or any successor plan thereof (the “Savings Plan”), such Voluntary Termination shall instead be treated as a Termination Due to Retirement solely for purposes of this Section 5.

(B) No Termination Without Cause shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 5, notwithstanding the fact that, either on, before or after the date of termination of the Employment Period with respect thereto, (I) Executive was eligible for Retirement as defined in the Savings Plan, (II) Executive requested to be treated as a retiree for purposes of the Savings Plan or any other plan or program of the Company or its affiliates, or (III) Executive or the Company could have terminated Executive’s employment as a Termination Due to Disability hereunder.

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BENEFITS PAYABLE : NON-CHANGE OF CONTROL

							Welfare
	Accrued	Pro Rata Target	Severance			Vested Benefits	Benefits
BENEFIT:	Salary	Bonus	Payment	Equity Awards	Vested Benefits	Enhancement	Continuation
				Determined Under	Determined Under		Determined Under
FORM OF PAYMENT:	Lump Sum	Lump Sum	Lump Sum	the Applicable Plan	the Applicable Plan	Lump Sum	the Applicable Plan
Termination For Cause	Payable	Not Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Without Cause	Payable	Payable	Payable	Options /Restricted Stock: Payable Other Equity Awards: Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Due to Retirement	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Disability	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Death	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available

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(d) Definitions.

“Accrued Salary” means any Base Salary earned, but unpaid, for services rendered to the Company on or prior to the date on which the Employment Period ends pursuant to Section 5(a) (other than Base Salary deferred pursuant to Executive’s election, as contemplated by Section 3(a) hereof), plus any vacation pay accrued by Executive as of such date.

“Available” means that the particular benefit shall be made available to Executive to the extent specifically provided herein or required by applicable law.

“Determined Under the Applicable Plan” means that the determination of whether a particular benefit shall or shall not be paid to Executive, and, where specifically required by this Agreement, the timing or form of any benefit payment, shall be made solely by application of the terms of the plan or program providing such benefit, except to the extent that the terms of such plan or program are expressly superseded or modified by this Agreement.

“Equity Awards” means the outstanding stock option, restricted stock, performance share and other equity or long-term incentive compensation awards, if any, held by Executive as of the date of his termination.

“ERPs” means any excess cash balance retirement plans maintained or as hereafter amended or established by the Company or its applicable affiliates.

“ESPs” means any excess investment and savings plans maintained or as hereafter amended or established by the Company or its applicable affiliates.

“Lump Sum” means a single lump sum cash payment.

“Not Available” means that the particular benefit shall be not be made available to Executive, except to the extent required by applicable law.

“Notice of Termination” means (i) in the case of a Termination For Cause, a written notice given by the Company to Executive within 30 calendar days of the Company’s having actual knowledge of the events giving rise to such Termination For Cause, (ii) in the case of a Termination Without Cause, a written notice given by the Company to Executive at least 30 calendar days before the effective date of such Termination Without Cause, and (iii) in the case of a Voluntary Termination, a written notice given by Executive to the Company indicating the effective date of Executive’s termination of the Employment Period in such Voluntary Termination, such effective date to be no earlier than 30 days following the date such notice is received by the Company from Executive.

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“Not Payable” means (i) with respect to benefits other than Equity Awards, such benefits shall not be paid or otherwise provided to Executive, and (ii) with respect to Equity Awards, such Equity Awards, to the extent unvested, unexercisable, or subject to restrictions that have not yet lapsed, shall be forfeited and/or canceled as of the date of termination of the Employment Period, unless otherwise determined by the Board or the appropriate committee of the Board in its discretion.

“Payable” means (i) with respect to benefits other than those described in clause (ii) of this paragraph, such benefits shall be paid to Executive in the amount, at the time, and in the form specified herein, and (ii) with respect to benefits described in this clause (ii), the following shall apply solely in the event of a Termination Without Cause, notwithstanding anything in the applicable plan or program to the contrary: (A) with respect to any outstanding stock options not yet expired as of the date of termination of the Employment Period, Executive shall be treated as though he remained in the employ of the Company for the two year period following such date, and except to the extent that any such options first expire during such period under the applicable plan or program, (I) any such options that would have become vested over such two year period solely by reason of Executive remaining in the employ of the Company during such period shall become immediately vested and nonforfeitable, (II) with respect to any options that by their terms would vest if the stock of the Company or an affiliate were to reach a specified market price, such options shall become vested and nonforfeitable if and when such stock reaches such price during such two year period, and (III) Executive shall have an additional two years to exercise any vested options (beyond the time to exercise such options permitted under the applicable plan or program), and (B) with respect to any restricted stock subject to restrictions that have not yet lapsed as of the date of termination of the Employment Period, such restrictions shall be deemed to have lapsed and such restricted stock shall become immediately vested and nonforfeitable as of such date.

“Pro-Rata Target Bonus” means an amount equal to the product of: (i) an amount equal to the Target Bonus Executive would have been entitled to receive under Section 3(b) for the calendar year in which the Employment Period terminates, and (ii) a fraction (the “Service Fraction”), the numerator of which is equal to the number of rounded months (rounded to the nearest number of whole months) in such calendar year which have elapsed as of the date of such termination, and the denominator of which is 12; provided that, if the Employment Period terminates in the last quarter of any calendar year, the Pro-Rata Target Bonus shall be the amount determined under the above formula or, if greater, the product of: (A) the bonus that would have been paid to Executive based on actual performance for such calendar year, and (B) the Service Fraction.

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“Severance Payment” means an amount equal to two times the sum of: (i) Executive’s Base Salary, and (ii) Executive’s Target Bonus amount under Section 3(b) hereof for the calendar year in which the Employment Period terminates.

“Termination Due to Death” means a termination of Executive’s employment due to the death of Executive.

“Termination Due to Disability” means (i) a termination of Executive’s employment by the Company as a result of a determination by the Board or the appropriate committee thereof that Executive has been incapable of substantially fulfilling the positions, duties, responsibilities and obligations set forth in this Agreement on account of physical, mental or emotional incapacity resulting from injury, sickness or disease for a period of (A) at least four consecutive months, or (B) more than six months in any twelve month period, or (ii) Executive’s termination of employment on account of Disability as defined in The Hartford Investment and Savings Plan, as may be amended from time to time.

“Termination Due to Retirement” means Executive’s termination of employment on account of Executive’s Retirement as defined in The Hartford Investment and Savings Plan, as may be amended from time to time.

“Termination For Cause” means a termination of Executive’s employment by the Company for any of the following reasons: (i) Executive is convicted of or enters a plea of guilty or nolo contendere to a felony, a crime of moral turpitude, dishonesty, breach of trust or unethical business conduct, or any crime involving the business of the Company or its affiliates; (ii) in the performance of his duties hereunder or otherwise to the detriment of the Company or its affiliates, Executive engages in (A) willful misconduct, (B) willful or gross neglect, (C) fraud, (D) misappropriation, (E) embezzlement, or (F) theft; (iii) Executive willfully fails to adhere to the policies and practices of the Company or devote substantially all of his business time and effort to the affairs thereof, or disobeys the directions of the Board to do either of the foregoing; (iv) Executive breaches this Agreement in any material respect; (v) Executive is adjudicated in any civil suit to have committed, or acknowledges in writing or in any agreement or stipulation his commission, of any theft, embezzlement, fraud or other intentional act of dishonesty involving any other person; or (vi) Executive knowingly and in a material respect violates the Code of Corporate Conduct of the Company. Executive shall be permitted to respond and defend himself before the Board within 30 days after delivery to Executive of written notification of any proposed Termination For Cause that specifies in detail the reasons for such termination. If the majority of the members of the Board (excluding Executive) do not confirm that the Company had grounds for a Termination For Cause within 30 days after Executive has had his hearing before the Board, Executive shall have the option of treating his employment as not having terminated or as having been terminated in a Termination Without Cause.

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“Termination Without Cause” means any involuntary termination of Executive’s employment by the Company other than a Termination For Cause, a Termination Due to Disability or a Termination Due to Death, and shall further mean the Company’s requiring Executive to be based at any office or location more than twenty-five (25) miles from the location at which he performs his services set forth in this Agreement as of the Commencement Date, except for travel reasonably required in the performance of Executive’s responsibilities.

“Vested Benefits” means amounts that are vested or that Executive is otherwise entitled to receive, without the performance by Executive of further services or the resolution of a contingency, under the terms of or in accordance with any investment and savings plan or cash balance retirement plan (including any plan providing retiree medical benefits) of the Company or its affiliates, and any ERPs or ESPs related thereto, and any deferred compensation or employee stock purchase plan or similar plan or program of the Company or its affiliates.

“Vested Benefits Enhancement” means (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable Federal rate as determined under Section 1274(d) of the Internal Revenue Code of 1986, as amended (the “Code”), of the additional retirement benefits that would have been payable or available to Executive under any ERPs, based on (A) the age and service Executive would have attained or completed had Executive continued in the Company’s employ until the second anniversary of the date of termination of the Employment Period, and (B) where compensation is a relevant factor, his pensionable compensation as of such date, such compensation to include, on the same terms as apply to other executives, any Severance Payment made to Executive, and (ii) solely for purposes of vesting in any benefits under any ESPs, Executive shall be treated as having continued in the Company’s employ until the second anniversary of the date of termination of the Employment Period.

“Voluntary Termination” means any voluntary termination of Executive’s Employment by Executive pursuant to this Section 5, other than a Termination Due to Retirement or a Termination Due to Disability by Executive.

“Welfare Benefits Continuation” means that until the second anniversary of the date of termination of the Employment Period, Executive and, if applicable, his dependents shall be entitled to continue participation in the life and health insurance benefit plans of the Company or its affiliates in which Executive and/or such dependents were participating as of the date of termination of the Employment Period, and such other welfare benefit plans thereof in which the Company is required by law to permit the participation of Executive and/or his dependents, (collectively, the “Welfare Benefit Plans”). Such participation shall be on the same terms and conditions (including the requirement that Executive pay any premiums generally paid by an employee) as would apply if Executive were still in the employ of the Company; provided that the continued

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participation of Executive and/or his dependents in such Welfare Benefit Plans shall cease on such earlier date as Executive may become eligible for comparable welfare benefits provided by a subsequent employer. To the extent that Welfare Benefits Continuation cannot be provided under the terms of the applicable plan, policy or program, the Company shall provide a comparable benefit under another plan or from the Company’s general assets.

6. Termination Following a Change of Control or Potential Change of Control.

This Section 6 shall apply (instead of Section 5) during the period commencing upon a Change of Control and continuing until the third anniversary thereof; provided that, in the event that Executive’s employment is terminated by the Company in a Termination Without Cause after the occurrence of a Potential Change of Control and a Change of Control occurs within one year following the date of such termination, then solely for purposes of this Agreement, Executive shall be deemed to have remained in the Company’s employ until the occurrence of the Change of Control and thereafter to have then been terminated by the Company in a Termination Without Cause. As a result, Executive shall be entitled to receive the excess of (i) the benefits payable in the event of a Termination Without Cause under this Section 6, over (ii) the amount of any benefits payable to Executive under Section 5.

(a) Early Termination of the Employment Period. Notwithstanding Section 1(b) hereof, the Employment Period shall end upon the earliest to occur of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination Within 180 Days, (iv) a Voluntary Termination After 180 Days, (v) a Termination For Good Reason, (vi) a Termination Due to Retirement, (vii) a Termination Due to Disability, or (viii) a Termination Due to Death.

(b) Notice of Termination. Communication of termination under this Section 6 shall be made to the other party by Notice of Termination in the case of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination Within 180 Days, (iv) a Voluntary Termination After 180 Days, or (v) a Termination For Good Reason.

(c) Benefits Payable Upon Termination; Rules for Determining Reason for Termination.

(i) Benefits Payable Upon Termination.

(A) Following the end of the Employment Period, Executive (or, in the event of his death, his surviving spouse, if any, or if none, his estate) shall be paid the type or types of compensation determined to be payable in accordance with the following table, such payment to be made in the form specified in such table and at the time established pursuant to Section 7 hereof. Capitalized terms used in such table (and otherwise in this Section 6) that are defined in Section 5, and not specifically defined in Section 6(d) hereof, shall have the meanings ascribed thereto under Section 5. Where such a capitalized term is defined solely in Section 6(d), or in both Section 5 and Section 6(d), such term shall have the meaning ascribed to it in Section 6(d).

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(B) The Company’s obligation to make the payments provided for in this Section 6 and otherwise to perform its obligations under this Section 6 shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Section 6 and such amounts shall not be reduced whether or not Executive obtains other employment.

(ii) Rules for Determining Reason for Termination.

(A) No Termination Without Cause, Voluntary Termination Within 180 Days or Termination For Good Reason shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 6, notwithstanding the fact that, either on, before or after the Date of Termination with respect thereto, (I) Executive was eligible for Retirement as defined in the Savings Plan, (II) Executive requested to be treated as a retiree for purposes of the Savings Plan or any other plan or program of the Company or its affiliates, or (III) Executive or the Company could have terminated Executive’s employment in a Termination Due to Disability hereunder.

(B) No Termination Due to Retirement shall be treated as a Voluntary Termination After 180 Days for purposes of this Section 6, notwithstanding the fact that the Date of Termination for such Termination Due to Retirement may occur within 180 days following a Change of Control.

(C) Notwithstanding any provision in this Agreement to the contrary, in the event of a Change of Control as described in clause (iii) or clause (iv) of the definition of the term Change of Control in Section 6(d) of this Agreement, if the employment of Executive involuntarily terminates on or after the date of a shareholder approval described in either of such clauses but before the date of a consummation described in either of such clauses, the date of termination of Executive’s employment shall be deemed for the purposes of this Agreement to be the day following the date of the applicable consummation.

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BENEFITS PAYABLE: CHANGE OF CONTROL

	Accrued	Pro Rata Target	Severance			Vested Benefits	Welfare
BENEFIT	Salary	Bonus	Payment	Equity Awards	Vested Benefits	Enhancement	Benefits Continuation
FORM OF				Determined Under	Determined Under		Determined Under the
PAYMENT	Lump Sum	Lump Sum	Lump Sum	the Applicable Plan	the Applicable Plan	Lump Sum	Applicable Plan
Termination For Cause	Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Without Cause	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination Within 180 Days	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination After 180 Days	Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination For Good Reason	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Termination Due to Retirement	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Disability	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Death	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available

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(d) Definitions.

“Beneficial Owner” means any Person who, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Act”)) of any securities of a company, including any such right pursuant to any agreement, arrangement or understanding (whether or not in writing), provided that: (i) a Person shall not be deemed the Beneficial Owner of any security as a result of an agreement, arrangement or understanding to vote such security (A) arising solely from a revocable proxy or consent given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the Act and the applicable rules and regulations thereunder, or (B) made in connection with, or to otherwise participate in, a proxy or consent solicitation made, or to be made, pursuant to, and in accordance with, the applicable provisions of the Act and the applicable rules and regulations thereunder, in either case described in clause (A) or (B) above, whether or not such agreement, arrangement or understanding is also then reportable by such Person on Schedule 13D under the Act (or any comparable or successor report); and (ii) a Person engaged in business as an underwriter of securities shall not be deemed to be the Beneficial Owner of any security acquired through such Person’s participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition.

“Change of Control” means:

(i) a report on Schedule 13D shall be filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Act disclosing that any Person, other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company, is the Beneficial Owner of twenty percent or more of the outstanding stock of the Company entitled to vote in the election of directors of the Company;

(ii) any Person, other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company, shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) entitled to vote in the election of directors of the Company for cash, securities or any other consideration, provided that after consummation of the offer, the Person in question is the Beneficial Owner of fifteen percent or more of the outstanding stock of the Company entitled to vote in the election of directors of the Company (calculated as provided in paragraph (d) of Rule 13d-3 under the Act in the case of rights to acquire stock);

(iii) any merger, consolidation, recapitalization or reorganization of the Company approved by the stockholders of the Company shall be consummated, other than any such transaction immediately following which the persons who were the Beneficial Owners of the outstanding securities of the Company entitled to vote in the election of directors of the Company immediately prior to such

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transaction are the Beneficial Owners of at least 55% of the total voting power represented by the securities of the entity surviving such transaction entitled to vote in the election of directors of such entity (or the ultimate parent of such entity) in substantially the same relative proportions as their ownership of the securities of the Company entitled to vote in the election of directors of the Company immediately prior to such transaction; provided that, such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such threshold (or to preserve such relative voting power) is due solely to the acquisition of voting securities by an employee benefit plan of the Company, such surviving entity or any subsidiary of such surviving entity;

(iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company approved by the stockholders of the Company shall be consummated; or

(v) within any 24 month period, the persons who were directors of the Company immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to the Company, provided that any director who was not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director (A) was elected to the Board by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually or by prior operation of this clause (v), and (B) was not designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (iii) or (iv) of this definition of the term Change of Control in Section 6(d) of this Agreement.

“Date of Termination” means (i) in the case of a termination of the Employment Period for which a Notice of Termination is required, the date of receipt of such Notice of Termination or, if later, the date specified therein, as the case may be, or (ii) in all other cases, the actual date on which Executive’s employment terminates during the Employment Period.

“Effective Date” means the earlier of: (i) the date on which a Potential Change of Control occurs, or (ii) the date on which a Change of Control occurs.

“Not Payable” means that a particular benefit shall not be paid or otherwise provided to Executive.

“Notice of Termination” means (i) in the case of a Termination For Cause, a written notice given by the Company to Executive, within 30 calendar days of the Company’s having actual knowledge of the events giving rise to such termination, (ii) in the case of a Termination Without Cause, a written notice given by the Company to Executive at least 30 calendar days before the effective date of such Termination Without Cause, (iii) in the

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case of a Voluntary Termination Within 180 Days or a Voluntary Termination After 180 Days, a written notice given by Executive to the Company at least 30 calendar days before the effective date of such termination, and (iv) in the case of a Termination For Good Reason, a written notice given by Executive to the Company within 180 days of Executive’s having actual knowledge of the events giving rise to such Termination For Good Reason, and which (A) indicates the specific termination provision in this Agreement relied upon, (B) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (C) if the termination date is other than the date of receipt of such notice, specifies the termination date of this Agreement (which date shall be not more than 15 days after the giving of such notice). The failure by Executive to set forth in such Notice of Termination any fact or circumstance that contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his rights hereunder.

“Payable” means that a particular benefit shall be paid to Executive in the amount, at the time, and in the form specified herein.

“Person” has the meaning ascribed to such term in Section 3(a)(9) of the Act, as supplemented by Section 13(d)(3) of the Act; provided, however, that Person shall not include (i) the Company, any subsidiary of the Company or any other Person controlled by the Company, (ii) any trustee or other fiduciary holding securities under any employee benefit plan of the Company or of any subsidiary of the Company, or (iii) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of securities of the Company.

“Potential Change of Control” means:

(i) a Person shall commence a tender offer, which if successfully consummated, would result in such Person being the Beneficial Owner of at least 15% of the stock of the Company entitled to vote in the election of directors of the Company;

(ii) the Company shall enter into an agreement the consummation of which shall constitute a Change of Control of the Company;

(iii) solicitation of proxies for the election of directors of the Company by anyone other than the Company, which, if such directors were elected, would result in the occurrence of a Change of Control described in Section 6(d) of this Agreement; or

(iv) any other event shall occur which is deemed to be a Potential Change of Control by the Board or the appropriate Committee thereof.

“Severance Payment” means a cash amount equal to three times the sum of (i) Executive’s Base Salary at the rate in effect as of the date on which the Employment Period terminates, and (ii) Executive’s Target Bonus for such year.

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“Termination For Cause” means the Company’s termination of Executive’s employment due to (i) Executive’s conviction of a felony; (ii) an act or acts of extreme dishonesty or gross misconduct on Executive’s part which result or are intended to result in material damage to the Company’s business or reputation; or (iii) repeated material violations by Executive of his obligations under Section 2 of this Agreement, which violations are demonstrably willful and deliberate on Executive’s part and which result in material damage to the Company’s business or reputation. Executive shall be permitted to respond and defend himself before the Board within 30 days after delivery to Executive of written notification of any proposed Termination for Cause which specifies in detail the reasons for such termination. If the majority of the members of the Board (excluding Executive) do not confirm that the Company had grounds for a Termination For Cause within 30 days after Executive has had his hearing before the Board, Executive shall have the option of treating his employment as not having terminated or as having been terminated pursuant to a Termination Without Cause.

“Termination For Good Reason” means the occurrence of any of the following after the occurrence of a Potential Change of Control or a Change of Control:

(i) (A) the assignment to Executive of any duties inconsistent in any material adverse respect with Executive’s position, duties, authority or responsibilities as contemplated by Section 2 of this Agreement, or (B) any other material adverse change in such position, including titles, authority or responsibilities;

(ii) any failure by the Company to comply with any of the provisions of Sections 3 and 4 of this Agreement at a level at least equal to that in effect immediately preceding the Change of Control or a Potential Change of Control, other than an insubstantial or inadvertent failure remedied by the Company promptly after receipt of notice thereof given by Executive;

(iii) the Company’s requiring Executive to be based at any office or location more than 25 miles from the location at which he performed his services specified under Section 2 hereof immediately prior to the Change of Control or a Potential Change of Control, except for travel reasonably required in the performance of Executive’s responsibilities;

(iv) any failure by the Company to obtain the assumption and agreement to perform this Agreement by a successor as contemplated by Section 10(d) hereof; or

(v) any attempt by the Company to terminate the Executive’s employment in a Termination For Cause that is determined by the Board pursuant to Section 5 or 6 hereof, or in a proceeding pursuant to Section 9 or Section 10 hereof, not to constitute a Termination For Cause.

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Notwithstanding the foregoing, a termination of Executive’s employment shall not be treated as a Termination For Good Reason (I) if Executive shall have consented in writing to the occurrence of the event giving rise to the claim of Termination For Good Reason, or (II) if Executive shall have delivered a Notice of Termination to the Company, and the facts and circumstances specified therein as providing a basis for such Termination For Good Reason are cured by the Company within 10 days of its receipt of such Notice of Termination.

“Vested Benefits Enhancement” means (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable Federal rate as determined under Section 1274(d) of the Internal Revenue Code of 1986, as amended (the “Code”), of the additional retirement benefits that would have been payable or available to Executive under any ERPs, based on (A) the age and service Executive would have attained or completed had Executive continued in the Company’s employ until the third anniversary of the occurrence of the Change of Control, and (B) where compensation is a relevant factor, his pensionable compensation as of the Date of Termination, such compensation to include, on the same terms as apply to other executives, any Severance Payment made to Executive, (ii) solely for purposes of vesting in any benefits under any ESPs, Executive shall be treated as having continued in the Company’s employ until the third anniversary of the occurrence of such Change of Control, and (iii) solely for purposes of determining eligibility for retiree medical benefits under any retirement plan or any retiree welfare benefit plan, policy or program of the Company or its affiliates, and any ERPs related thereto, Executive shall be treated as having continued in the Company’s employ until the third anniversary of the occurrence of such Change of Control and to have retired on the last day of such period.

“Voluntary Termination Within 180 Days” means a termination of employment by Executive for any reason within the first 180 days following a Change of Control, and “Voluntary Termination After 180 Days” means a termination of employment by Executive other than a Termination For Good Reason, a Termination Due to Disability by Executive, or a Termination Due to Death within the remaining 2 years and 6 months following a Change of Control.

“Welfare Benefits Continuation” shall have the same meaning as that described in Section 5 hereof, except that the entitlement of Executive and/or his dependents to participation in the Welfare Benefit Plans shall continue until the third anniversary of the Date of Termination.

(e) Out-Placement Services. If the Employment Period terminates because of a Termination Without Cause or a Termination For Good Reason, Executive shall be entitled to out-placement services, provided by the Company or its designee at the Company’s expense, for 12 months following the Date of Termination, or such lesser period as the Executive may require such services.

(f) Certain Further Payments by Company.

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(i) Tax Reimbursement Payment. In the event that any amount or benefit paid or distributed to Executive pursuant to this Agreement, taken together with any amounts or benefits otherwise paid or distributed to Executive by the Company or any affiliate, including amounts attributable to the vesting of stock options and restricted stock and the exercise of stock options (collectively, the “Covered Payments”), are or become subject to the tax (the “Excise Tax”) imposed under Section 4999 of the Internal Revenue Code of 1986, as amended, or any similar tax that may hereafter be imposed, the Company shall pay to the Executive at the time specified in this Section an additional amount (the “Tax Reimbursement Payment”) such that the net amount retained by the Executive with respect to such Covered Payments, after deduction of any Excise Tax on the Covered Payments and any Federal, state and local income tax and other tax on the Tax Reimbursement Payment provided for by this Section, but before deduction for any Federal, state or local income or employment tax withholding on such Covered Payments, shall be equal to the amount of the Covered Payments.

(ii) Applicable Rules. For purposes of determining whether any of the Covered Payments will be subject to the Excise Tax and the amount of such Excise Tax,

(A) such Covered Payments will be treated as “parachute payments” within the meaning of Section 280G of the Code, and all “parachute payments” in excess of the “base amount” (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the good faith judgment of the Company’s independent certified public accountants appointed prior to the Effective Date or tax counsel selected by such accountants (the “Accountants”), the Company has a reasonable basis to conclude that such Covered Payments (in whole or in part) either do not constitute “parachute payments” or represent reasonable compensation for personal services actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the “base amount,” or such “parachute payments” are otherwise not subject to such Excise Tax, and

(B) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Accountants in accordance with the principles of Section 280G of the Code.

(iii) Additional Rules. For purposes of determining the amount of the Tax Reimbursement Payment, the Executive shall be deemed to pay: (A) Federal income taxes at the highest applicable marginal rate of Federal income taxation for the calendar year in which the Tax Reimbursement Payment is to be made, and (B) any applicable state and local income and other taxes at the highest applicable marginal rate of taxation for the calendar year in which the Tax Reimbursement Payment is to be made, net of the maximum reduction in Federal incomes taxes which could be obtained from the deduction of such state or local taxes if paid in such year.

(iv) Repayment or Additional Payment in Certain Circumstances.

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(A) Repayment. In the event that the Excise Tax is subsequently determined by the Accountants or pursuant to any proceeding or negotiations with the Internal Revenue Service to be less than the amount taken into account hereunder in calculating the Tax Reimbursement Payment made, Executive shall repay to the Company, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior Tax Reimbursement Payment that would not have been paid if such lesser Excise Tax had been applied in initially calculating such Tax Reimbursement Payment. Notwithstanding the foregoing, in the event any portion of the Tax Reimbursement Payment to be repaid to the Company has been paid to any Federal, state or local tax authority, repayment thereof shall not be required unless and until actual refund or credit of such portion has been made to Executive by the applicable tax authority. Executive and the Company shall mutually agree upon the course of action (if any) to be pursued in further pursuing such refund or credit, if Executive’s good faith claim for refund or credit is denied.

(B) Additional Tax Reimbursement Payment. In the event that the Excise Tax is later determined by the Accountants or pursuant to any proceeding or negotiations with the Internal Revenue Service to exceed the amount taken into account hereunder at the time the Tax Reimbursement Payment is made (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of the Tax Reimbursement Payment), the Company shall make an additional Tax Reimbursement Payment in respect of such excess (plus any interest or penalty payable with respect to such excess) at the time that the amount of such excess is finally determined.

(v) Timing for Tax Reimbursement Payment. The Tax Reimbursement Payment (or portion thereof) provided for in this Section 6 shall be paid to Executive not later than 10 business days following the payment of the Covered Payments; provided, however, that if the amount of such Tax Reimbursement Payment (or portion thereof) cannot be finally determined on or before the date on which payment is due, the Company shall pay to Executive by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than 45 calendar days after payment of the related Covered Payment. To the extent that the amount of the estimated Tax Reimbursement Payment exceeds the amount subsequently determined to have been due, Executive shall repay such excess to the Company on the fifth business day after written demand by the Company for payment.

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7. Timing of Payments.

Accrued Salary, Severance Payments and Vested Benefits Enhancements shall be paid no later than 10 days following the termination of the Employment Period. Pro-Rata Target Bonus shall be paid as follows: (a) if the Employment Period terminates in the first, second or third calendar quarter of any particular calendar year, then the Pro-Rata Target Bonus shall be paid no later than 10 days following the termination of the Employment Period; or (b) if the Employment Period terminates in the fourth calendar quarter of any particular calendar year, then the Pro-Rata Target Bonus shall be paid no later than the same time as similar awards are paid to other executives participating in the plans or programs under which the awards are paid, but in no event later than March 31 of the calendar year following the end of such fourth calendar quarter. Vested Benefits and Equity Awards shall be paid no later than the time for payment Determined Under the Applicable Plan except as otherwise expressly superseded or modified by this Agreement. Tax Reimbursement Payments shall be paid at the time specified in Section 6 hereof. Notwithstanding the foregoing, solely for purposes of amounts payable pursuant to Section 5 hereof, if any amount payable to Executive pursuant to Section 5 would be nondeductible by the Company under Section 162(m) of the Code if paid in the year of Executive’s termination, the Company shall have the option of paying such nondeductible amount, with interest at the one-year treasury bill rate as in effect on the date of such termination as reported in the Wall Street Journal, on the first day of the second calendar quarter in the year following such termination.

8. Full Discharge of Company Obligations.

Except in the case of amounts payable to Executive in the event of a termination of employment following a Potential Change of Control as described in the first paragraph of Section 6, and except as expressly provided in the last sentence of this Section 8, the amounts payable to Executive pursuant to Section 5 following termination of his employment (including amounts payable with respect to Vested Benefits) shall be in full and complete satisfaction of Executive’s rights under Section 5 of this Agreement and any other claims he may have in respect of his employment by the Company or any of its affiliates. Such amounts shall constitute liquidated damages with respect to any and all such rights and claims and, upon Executive’s receipt of such amounts, the Company shall be released and discharged from any and all liability to Executive in connection with Section 5 of this Agreement or otherwise in connection with Executive’s employment with the Company and its affiliates. In no event shall Executive be obligated to seek other employment or take any action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not Executive obtains other employment. Nothing in this Section 8 shall be construed to release the Company from its obligation to indemnify Executive as provided in Section 4(e) hereof.

9. Noncompetition, Confidentiality and Other Covenants.

By and in consideration of the compensation and benefits to be provided by the Company hereunder, including the severance arrangements set forth herein, Executive agrees to the following:

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(a) Noncompetition. During the Employment Period and until the earlier of: (i) the last day of the one year period following any Voluntary Termination of the Employment Period by Executive pursuant to Section 5 hereof, or (ii) the date a Change of Control occurs (the “Restriction Period”), Executive shall not become associated with any entity, whether as a principal, partner, employee, agent, consultant, shareholder (other than as a holder, or a member of a group which is a holder, of not in excess of 1% of the outstanding voting shares of any publicly traded company) or in any other relationship or capacity, paid or unpaid, that is actively engaged in any geographic area in any business which is in competition with the business of the Company. Notwithstanding anything herein to the contrary, the terms of this Section 9(a) shall not apply in the event of any termination of employment following a Change of Control as provided for in Section 6 of this Agreement, including any termination following a Potential Change of Control as described in the first paragraph of Section 6.

The Company shall, in its sole discretion, have the right to enforce or waive the terms of this provision in connection with the Restriction Period. If the Company exercises its right to enforce this provision for the Restriction Period, the Company will provide Executive with written notice of its intent to enforce such provision within fifteen (15) days following the Company’s receipt of the Notice of Termination from Executive and the Company agrees to pay Executive an amount equal to one year of Executive’s then current Base Salary plus one year of Executive’s then current Target Bonus as compensation for the Restriction Period. Such amount shall be paid to Executive in equal monthly installments during the Restriction Period. Executive agrees that the terms of the Restriction Period are reasonable and that this compensation is above and beyond any amounts necessary to support the terms of the Restriction Period as set forth herein.

(b) Confidentiality. Without the prior written consent of the Company, except in the course of performing his duties hereunder and except to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency, Executive shall not disclose to any third person, or permit the use of for the benefit of any person or any entity other than the Company or its affiliates, any trade secrets, customer lists, information regarding product development, marketing plans, sales plans, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, financial records, or other financial, organizational, commercial, business, sales, marketing, technical, product or employee information relating to the Company or its affiliates or information designated as confidential, proprietary, and/or a trade secret, or any other information relating to the Company or its affiliates that Executive knows from the circumstances, in good faith and good conscience, should be treated as confidential, or any information that the Company or its affiliates may receive belonging to customers, agents or others who do business with the Company or its affiliates, except to the extent that any such information previously has been disclosed to the public by the Company or is in the public domain (other than by reason of Executive’s violation of this Section 9(b)).

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(c) Non-Solicitation of Employees. During the Employment Period and until the earlier of: (i) the last day of the one year period following any Voluntary Termination of the Employment Period by Executive pursuant to Section 5 hereof, or (ii) the date a Change of Control occurs, Executive shall not directly or indirectly solicit, encourage or induce any employee of the Company or its affiliates to terminate employment with such entity, and shall not directly or indirectly, either individually or as owner, agent, employee, consultant or otherwise, employ or offer employment to any person who is or was employed by the Company or an affiliate thereof unless such person shall have ceased to be employed by such entity for a period of at least six months. Notwithstanding anything herein to the contrary, the terms of this Section 9(c) shall not apply in the event of any termination of employment following a Change of Control as provided for in Section 6 of this Agreement, including any termination following a Potential Change of Control as described in the first paragraph of Section 6.

(d) Company Property. Except as expressly provided herein, promptly following any termination of the Employment Period, Executive shall return to the Company all property of the Company, and all copies thereof in Executive’s possession or under his control.

(e) Injunctive Relief and Other Remedies with Respect to Covenants. Executive acknowledges and agrees that the covenants and obligations of Executive with respect to noncompetition, confidentiality, nonsolicitation, and Company property relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, Executive agrees that the Company (i) shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) restraining Executive from committing any violation of the covenants and obligations contained in this Section 9, and (ii) shall have no further obligation to make any payments to Executive hereunder following any material violation of the covenants and obligations contained in this Section 9. These remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity. In connection with the foregoing provisions of this Section 9, Executive represents that his economic means and circumstances are such that such provisions will not prevent him from providing for himself and his family on a basis satisfactory to him. Notwithstanding the foregoing, in no event shall an asserted violation of the provisions of this Section constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement following a Change of Control.

10. Miscellaneous.

(a) Survival. All of the provisions of Sections 5 (relating to termination of the Employment Period prior to a Change of Control), 6 (relating to termination of the Employment Period following a Change of Control or a Potential Change of Control), 9 (relating to noncompetition, confidentiality, nonsolicitation and Company property),

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10(b) (relating to arbitration), 10(c) (relating to legal fees) and 10(n) (relating to governing law) of this Agreement shall survive the termination of this Agreement.

(b) Arbitration. Except as provided in Section 9, any dispute or controversy arising under or in connection with this Agreement shall be resolved by binding arbitration. Such arbitration shall be held in the city of Hartford, Connecticut and except to the extent inconsistent with this Agreement, shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect at the time of the arbitration, and otherwise in accordance with the principles that would be applied by a court of law or equity. The arbitrator shall be acceptable to both the Company and Executive. If the parties cannot agree on an acceptable arbitrator, the dispute or controversy shall be heard by a panel of three arbitrators; one appointed by each of the parties and the third appointed by the other two arbitrators. The Company and Executive further agree that they will abide by and perform any award or awards rendered by the arbitrators and that a judgment may be entered on any award or awards rendered by any state or federal court having jurisdiction over the Company or Executive or any of their respective property.

(c) Legal Fees and Expenses. In any contest (whether initiated by Executive or by the Company) as to the validity, enforceability or interpretation of any provision of this Agreement, the Company shall pay Executive’s legal expenses (or cause such expenses to be paid) including, without limitation, his reasonable attorney’s fees, on a quarterly basis, upon presentation of proof of such expenses in a form acceptable to the Company, provided that Executive shall reimburse the Company for such amounts, plus simple interest thereon at the 90-day United States Treasury Bill rate as in effect from time to time, compounded annually, if Executive shall not prevail, in whole or in part, as to any material issue as to the validity, enforceability or interpretation of any provision of this Agreement.

(d) Successors; Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Company and its successors. The Company shall require any successor to all or substantially all of the business and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform this Agreement if no such succession had taken place. This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by Executive otherwise than by will or the law of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

(e) Assignment. Except as provided in Section 10(d), neither this Agreement nor any of the rights or obligations hereunder shall be assigned or delegated by any party hereto without the prior written consent of the other party.

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(f) Entire Agreement. Exclusive of Executive’s offer letter dated April 23, 2001 (the “Offer Letter”), this Agreement constitutes the entire agreement between the parties hereto with respect to the matters referred to herein. This Agreement supersedes and replaces any prior employment or severance agreement or arrangement between the Company and Executive. No other agreement relating to the terms of Executive’s employment by the Company, oral or otherwise, shall be binding between the parties unless it is in writing and signed by the party against whom enforcement is sought. There are no promises, representations, inducements or statements between the parties other than those that are expressly contained herein and in the Offer Letter. Executive acknowledges that he is entering into this Agreement of his own free will and accord, and with no duress, and that he has read this Agreement and that he understands it and its legal consequences.

(g) Severability; Reformation. In the event that one or more of the provisions of this Agreement shall become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. In the event of a determination that any of the provisions of Section 9(a), Section 9(b) or Section 9(c) are not enforceable in accordance with their terms, Executive and the Company agree that such Section shall be reformed to make such Section enforceable in a manner that provides the Company the maximum rights permitted at law.

(h) Waiver. Waiver by any party hereto of any breach or default by the other party of any of the terms of this Agreement shall not operate as a waiver of any other breach or default, whether similar to or different from the breach or default waived. No waiver of any provision of this Agreement shall be implied from any course of dealing between the parties hereto or from any failure by either party hereto to assert its or his rights hereunder on any occasion or series of occasions.

(i) Notices. Any notice required or desired to be delivered under this Agreement shall be in writing and shall be delivered personally, by courier service, by registered mail, return receipt requested, or by telecopy and shall be effective upon actual receipt by the party to which such notice shall be directed, and shall be addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):

If to the Company: The Hartford Financial Services Group, Inc.
Law Department, HO-1-09
Hartford Plaza
Hartford, CT 06115
Attention: Corporate Secretary

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with a copy to:	Debevoise & Plimpton 875 Third Avenue New York, NY 10022 Attn: Lawrence K. Cagney, Esq.
If to Executive:	The home address of Executive shown on the records of the Company

(j) Amendments. This Agreement may not be altered, modified or amended except by a written instrument signed by each of the parties hereto.

(k) Headings. Headings to provisions of this Agreement are for the convenience of the parties only and are not intended to be part of or to affect the meaning or interpretation hereof.

(l) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(m) Withholding. Any payments provided for herein shall be reduced by any amounts required to be withheld by the Company from time to time under applicable Federal, State or local income or employment tax laws or similar statutes or other provisions of law then in effect.

(n) Governing Law. This Agreement shall be governed by the laws of the State of Connecticut, without reference to principles of conflicts or choice of law under which the law of any other jurisdiction would apply.

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EX-10.06

Exhibit 10.06

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT, dated as of November 5, 2001, by and between The Hartford Financial Services Group, Inc., a Delaware corporation (the “Company”), and David M. Znamierowski (“Executive”).

W I T N E S S E T H:

          WHEREAS, the Company wishes to recognize the substantial services that Executive has provided to the Company; and

          WHEREAS, the Company desires that Executive continue to perform such services and to enter into an agreement embodying the terms of such employment (the “Agreement”); and

          WHEREAS, Executive desires to continue such employment and enter into such Agreement;

          NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Company and Executive hereby agree as follows:

1. Employment.

(a) Agreement to Employ. Upon the terms and subject to the conditions of this Agreement, the Company hereby agrees to continue to employ Executive and Executive hereby agrees to continue his employment by the Company.

(b) Term of Employment. Except as otherwise provided below, the Company shall employ Executive for the period commencing on the date first written above (the “Commencement Date”) and ending on the third anniversary of the Commencement Date. At the expiration of the original term or any extended term (each a “Renewal Date”), Executive’s employment hereunder shall be extended automatically, upon the same terms and conditions, for successive one-year periods, unless either party shall give written notice to the other of its intention not to renew such employment at least twelve months prior to such Renewal Date. In the event that this Agreement expires at the end of its then current term by reason of either party having delivered a written notice of non-renewal to the other in accordance with this Section 1(b), then, except as otherwise provided in Section 9, neither the Company nor Executive shall have any further duties or obligations to, or rights against, the other party under or pursuant to this Agreement; provided that notwithstanding the foregoing, the Company shall continue to have any and all rights against Executive in the event that Executive was involved during the Employment Period in acts that would have permitted a Termination For Cause as defined in Section 5(d) hereof. Without limiting the generality of the foregoing, upon the occurrence of a Change of Control (as defined below), the term of this Agreement shall be extended automatically without any action by either party until the third anniversary of such Change of Control. Notwithstanding the foregoing, if not previously terminated pursuant to Sections 1(b), 5(a) or 6(a), the term of this Agreement shall terminate on the last day of the month in which Executive attains age

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65, and such a termination upon Executive reaching age 65 shall be deemed to be a Termination Due to Retirement for purposes of this Agreement. The period during with Executive is employed pursuant to this Agreement, including any extension thereof in accordance with this Section 1(b), shall be referred to as the “Employment Period.”

2. Position and Duties.

During the Employment Period, Executive shall serve as Group Senior Vice President and Chief Investment Officer of the Company, President of HIMCO, and a member of the Office of the Chairman of the Company, and/or in such other position or positions with the Company or its affiliates commensurate with his position and experience as the Board of Directors of the Company (the “Board”) shall from time to time specify. During the Employment Period, Executive shall have the duties, responsibilities and obligations customarily assigned to individuals serving in the position or positions in which Executive serves hereunder and such other duties, responsibilities and obligations as the Board shall from time to time specify. Executive shall devote his full time to the services required of him hereunder, except for vacation time and reasonable periods of absence due to sickness, personal injury or other disability, and shall use his best efforts, judgment, skill and energy to perform such services in a manner consonant with the duties of his position and to improve and advance the business and interests of the Company and its affiliates. During the Employment Period, Executive shall comply with the Code of Corporate Conduct of the Company. Unless and to the extent inconsistent with the terms of any published Company policy or code of conduct as in effect on the date hereof and as hereafter amended, nothing contained herein shall preclude Executive from (a) serving on the board of directors of any business corporation with the consent of the Board, (b) serving on the board of, or working for, any charitable or community organization, or (c) pursuing his personal financial and legal affairs, so long as the foregoing activities, individually or collectively, do not interfere with the performance of Executive’s duties hereunder or violate any of the provisions of Section 9 hereof.

3. Compensation.

(a) Base Salary. During the Employment Period, the Company shall pay Executive a base salary at the annual rate as in effect on the date hereof. The annual base salary payable under this paragraph shall be reduced, however, to the extent that Executive elects to defer such salary under the terms of any deferred compensation or savings plan or arrangement maintained or established by the Company or its affiliates. The Board or the appropriate committee of the Board may in its discretion periodically review Executive’s base salary in light of competitive practices, the base salaries paid to other executive officers of the Company and the performance of Executive and the Company and its applicable affiliates, and may, in its discretion, increase such base salary by an amount it determines to be appropriate. Any such increase shall not reduce or limit any other obligation of the Company hereunder. Executive’s base salary (as set forth above or as may be increased from time to time) shall not be reduced following any Change of Control, but may be reduced prior to a Change of Control solely pursuant to a cost-saving plan or structural realignment of total compensation elements that includes all senior executives and only to the extent that such reduction is proportionate to the reductions applicable to other senior executives. Executive’s annual base salary payable hereunder, as it may be increased or reduced from time to time as provided herein and without reduction for any

2

amounts deferred as described above, shall be referred to herein as “Base Salary.” The Company shall pay Executive the portion of his Base Salary not deferred not less frequently than in equal monthly installments.

(b) Annual Bonus. For each calendar year ending during the Employment Period, Executive shall have the opportunity to earn and receive an annual bonus, based on the achievement of target levels of performance, equal to the percentage of his Base Salary used to calculate such annual bonus as of the date hereof. Executive’s annual bonus opportunity may be increased above such percentage from time to time by the Board or the appropriate committee thereof. Executive’s annual bonus opportunity shall not be reduced following a Change of Control, but may be reduced prior to a Change of Control solely pursuant to a cost-saving plan or structural realignment of total compensation elements that includes all senior executives and only to the extent that such reduction is proportionate to the reductions applicable to other senior executives. Executive’s annual bonus opportunity, as it may be increased or reduced from time to time as provided herein, shall be referred to herein as “Target Bonus.” The actual bonus, if any, payable for any such year shall be determined in accordance with the terms of the Company’s Annual Executive Bonus Program or any successor annual incentive plan (the “Annual Plan”) based upon the performance of the Company and/or its applicable affiliates and/or Executive against target objectives established under such Annual Plan. Subject to Executive’s election to defer all or a portion of any annual bonus payable hereunder pursuant to the terms of any deferred compensation or savings plan or arrangement maintained or established by the Company or its affiliates, any annual bonus payable under this Section 3(b) shall be paid to Executive in accordance with the terms of the Annual Plan.

(c) Long-term Incentive Compensation. During the Employment Period, Executive shall participate in all of the Company’s existing and future long-term incentive compensation programs for key executives at a level commensurate with his position with the Company and consistent with the Company’s then current policies and practices, as determined in good faith by the Board or the appropriate committee of the Board.

4. Benefits, Perquisites and Expenses.

(a) Benefits. During the Employment Period, Executive (and, to the extent applicable, his dependents) shall be eligible to participate in or be covered under (i) each welfare benefit plan or program maintained or as hereafter amended or established by the Company or its applicable affiliates, including, without limitation, each group life, hospitalization, medical, dental, health, accident or disability insurance or similar plan or program of thereof, and (ii) each pension, retirement, savings, deferred compensation, stock purchase or other similar plan or program maintained or as hereafter amended or established by the Company or its applicable affiliates, in each case to the extent that Executive is eligible to participate in any such plan or program under the generally applicable provisions thereof. Nothing in this Section 4(a) shall limit the Company’s right to amend or terminate any such plan or program in accordance with the procedures set forth therein or as permitted by applicable law.

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(b) Perquisites. For each calendar year during the Employment Period, Executive shall be entitled to at least the number of paid vacation days per year that Executive is entitled to as of the date hereof, and shall also be entitled to receive such other perquisites as are generally provided to him as of the date hereof or are hereafter provided to other similarly situated senior executives of the Company in accordance with the then current policies and practices of the Company.

(c) Business Expenses. During the Employment Period, the Company shall pay or reimburse Executive for all reasonable business expenses incurred or paid by Executive in the performance of Executive’s duties hereunder, upon presentation of expense statements or vouchers and such other information as the Company may require in accordance with the generally applicable policies and procedures of the Company.

(d) Office and Support Staff. During the Employment Period, Executives shall be entitled to an office with furnishings and other material appointments, and to secretarial and other assistance, at a level that is at least commensurate with the foregoing provided to him as of the date hereof or is hereafter provided to other similarly situated senior executives of the Company.

(e) Indemnification. The Company shall indemnify Executive and hold Executive harmless from and against any claim, loss or cause of action, regardless of whether asserted during or after the Employment Period, arising from or out of Executive’s performance as an officer, director or employee of the Company or any of its affiliates or in any other capacity, including any fiduciary capacity in which Executive serves at the request of the Company, to the maximum extent permitted by applicable law and under the Certificate of Incorporation and By-Laws of the Company, as my be amended from time to time (the “Governing Documents”), provided that in no event shall the protection afforded to Executive be less than that afforded under the Governing Documents as in effect on the Commencement Date.

5.	Termination of Employment
	The provisions of this Section 5 shall apply prior to the occurrence of a Change of Control and, if Executive is still in the Company’s employ, shall again become applicable upon the third anniversary of such Change of Control.

(a) Early Termination of the Employment Period. Notwithstanding Section 1(b) hereof, the Employment Period shall end upon the earliest to occur of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination, (iv) a Termination Due to Retirement, (v) a Termination Due to Disability, or (vi) a Termination Due to Death.

(b) Notice of Termination. Communication of termination under this Section 5 shall be made to the other party by Notice of Termination in the case of (i) a Termination For Cause, (ii) a Termination Without Cause, or (iii) a Voluntary Termination.

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(c) Benefits Payable Upon Termination; Rules for Determining Reason for Termination.

(i) Benefits Payable Upon Termination. Following the end of the Employment Period pursuant to Section 5(a), Executive (or, in the event of his death, his surviving spouse, if any, or if none, his estate) shall be paid the type or types of compensation determined to be payable in accordance with the following table, such payment to be made in the form specified in such table and at the time established pursuant to Section 7 hereof. Capitalized terms used in such table shall have the meanings set forth in Section 5(d) hereof.

(ii) Rules for Determining Reason for Termination.

(A) If a Voluntary Termination occurs on a date that Executive is eligible for Retirement as defined in The Hartford Investment and Savings Plan, as may be amended from time to time, or any successor plan thereof (the “Savings Plan”), such Voluntary Termination shall instead be treated as a Termination Due to Retirement solely for purposes of this Section 5.

(B) No Termination Without Cause shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 5, notwithstanding the fact that, either on, before or after the date of termination of the Employment Period with respect thereto, (I) Executive was eligible for Retirement as defined in the Savings Plan, (II) Executive requested to be treated as a retiree for purposes of the Savings Plan or any other plan or program of the Company or its affiliates, or (III) Executive or the Company could have terminated Executive’s employment in a Termination Due to Disability hereunder.

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BENEFITS PAYABLE : NON-CHANGE OF CONTROL

						Vested
	Accrued	Pro Rata Target	Severance			Benefits	Welfare Benefits
BENEFIT:	Salary	Bonus	Payment	Equity Awards	Vested Benefits	Enhancement	Continuation
FORM OF PAYMENT:	Lump Sum	Lump Sum	Lump Sum	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Lump Sum	Determined Under the Applicable Plan
Termination For Cause	Payable	Not Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Without Cause	Payable	Payable	Payable	Options / Restricted Stock: Payable Other Equity Awards:	Determined Under the Applicable Plan	Payable	Available
				Determined Under the Applicable Plan
Voluntary Termination	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Due to Retirement	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Disability	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Death	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available

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(d) Definitions.

“Accrued Salary” means any Base Salary earned, but unpaid, for services rendered to the Company on or prior to the date on which the Employment Period ends pursuant to Section 5(a) (other than Base Salary deferred pursuant to Executive’s election, as contemplated by Section 3(a) hereof), plus any vacation pay accrued by Executive as of such date.

“Available” means that the particular benefit shall be made available to Executive to the extent specifically provided herein or required by applicable law.

“Determined Under the Applicable Plan” means that the determination of whether a particular benefit shall or shall not be paid to Executive, and, where specifically required by this Agreement, the timing or form of any benefit payment, shall be made solely by application of the terms of the plan or program providing such benefit, except to the extent that the terms of such plan or program are expressly superseded or modified by this Agreement.

“Equity Awards” means the outstanding stock option, restricted stock, performance share and other equity or long-term incentive compensation awards, if any, held by Executive as of the date of his termination.

“ERPs” means any excess retirement plans maintained or as hereafter amended or established by the Company or its applicable affiliates.

“ESPs” means any excess investment and savings plans maintained or as hereafter amended or established by the Company or its applicable affiliates.

“Lump Sum” means a single lump sum cash payment.

“Not Available” means that the particular benefit shall not be made available to Executive, except to the extent required by applicable law.

“Not Payable” means (i) with respect to benefits other than Equity Awards, such benefits shall not be paid or otherwise provided to Executive, and (ii) with respect to Equity Awards, such Equity Awards, to the extent unvested, unexercisable, or subject to restrictions that have not yet lapsed, shall be forfeited and/or canceled as of the date of termination of the Employment Period, unless otherwise determined by the Board or the appropriate committee of the Board in its discretion.

“Notice of Termination” means (i) in the case of Termination For Cause, a written notice given by the Company to Executive within 30 calendar days of

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the Company’s having actual knowledge of the events giving rise to such Termination For Cause, (ii) in the case of a Termination Without Cause, a written notice given by the Company to Executive at least 30 calendar days before the effective date of such Termination Without Cause, and (iii) in the case of a Voluntary Termination, a written notice given by Executive to the Company indicating the effective date of Executive’s termination of Employment Period in such Voluntary Termination, such effective date to be no earlier than 30 days following the date such notice is received by the Company from Executive.

“Payable” means (i) with respect to benefits other than those described in clause (ii) of this paragraph, such benefits shall be paid to Executive in the amount, at the time, and in the form specified herein, and (ii) with respect to benefits described in this clause (ii), the following shall apply solely in the event of a Termination Without Cause, notwithstanding anything in the applicable plan or program to the contrary: (A) with respect to any outstanding stock options not yet expired as of the date of termination of the Employment Period, Executive shall be treated as though he remained in the employ of the Company for the two year period following such date, and except to the extent that any such options first expire during such period under the applicable plan or program, (I) any such options that would have become vested over such two year period solely by reason of Executive remaining in the employ of the Company during such period shall become immediately vested and nonforfeitable, (II) with respect to any options that by their terms would vest if the stock of the Company or any affiliate were to reach a specified market price, such options shall become vested and nonforfeitable if and when such stock reaches such price during such two year period, and (III) Executive shall have an additional two years to exercise any vested options (beyond the time to exercise such options permitted under the applicable plan or program), and (B) with respect to any restricted stock subject to restrictions that have not yet lapsed as of the date of termination of the Employment Period, such restrictions shall be deemed to have lapsed and such restricted stock shall become immediately vested and nonforfeitable as of such date.

“Pro-Rata Target Bonus” means an amount equal to the product of: (i) an amount equal to the Target Bonus Executive would have been entitled to receive under Section 3(b) for the calendar year in which the Employment Period terminates, and (ii) a fraction (the “Service Fraction”), the numerator of which is equal to the number of rounded months (rounded to the nearest number of whole months) in such calendar year which have elapsed as of the date of such termination, and the denominator of which is 12; provided that, if the Employment Period terminates in the last quarter of any calendar year, the Pro-Rata Target Bonus shall be the amount determined under the above formula or, if greater, the product of: (A) the bonus that would have been paid to Executive based on actual performance for such calendar year, and (B) the Service Fraction.

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“Severance Payment” means an amount equal to two times the sum of: (i) Executive’s Base Salary at the rate in effect as of the date of termination of the Employment Period, and (ii) Executive’s Target Bonus amount under Section 3(b) hereof for the calendar year in which the Employment Period terminates.

“Termination Due to Death” means a termination of Executive’s employment due to death of Executive.

“Termination Due to Disability” means (i) termination of Executive’s employment by the Company as a result of a determination by the Board or the appropriate committee thereof that Executive has been incapable of substantially fulfilling the positions, duties, responsibilities and obligations set forth in this Agreement on account of physical, mental or emotional incapacity resulting from injury, sickness or disease for a period of (A) at least four consecutive months, or (B) more than six months in any twelve month period, or (ii) Executive’s termination of employment on account of Disability as defined in The Hartford Investment and Savings Plan, as may be amended from time to time.

“Termination Due to Retirement” means Executive’s termination of employment on account of Executive’s Retirement as defined in The Hartford Investment and Savings Plan, as may be amended from time to time.

“Termination For Cause” means a termination of Executive’s employment by the Company for any of the following reasons: (i) Executive is convicted of or enters a plea of guilty or nolo contendere to a felony, a crime of moral turpitude, dishonesty, breach of trust or unethical business conduct, or any crime involving the business of the Company or its affiliates; (ii) in the performance of his duties hereunder or otherwise to the detriment of the Company or its affiliates, Executive engages in (A) willful misconduct, (B) willful or gross negligence, (C) fraud, (D) misappropriation, (E) embezzlement, or (F) theft; (iii) Executive willfully fails to adhere to the policies and practices of the Company or devote substantially all of his business time and effort to the affairs thereof, or disobeys the directions of the Board to do either of the foregoing; (iv) Executive breaches this Agreement in any material respect; (v) Executive is adjudicated in any civil suit to have committed, or acknowledges in writing or in any agreement or stipulation his commission, of any theft, embezzlement, fraud or other intentional act of dishonesty involving any other person; or (vi) Executive violates the Code of Corporate Conduct of the Company. Executive shall be permitted to respond and defend himself before the Board within 30 days after delivery to Executive of written notification of any proposed Termination For Cause that specifies in detail the reasons for such termination. If the majority of the members of the Board (excluding Executive) do not confirm that the Company had grounds for a Termination For Cause within 30 days after Executive has had his hearing before the Board, Executive shall have the option

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of treating his employment as not having terminated or as having been terminated in a Termination Without Cause.

“Termination Without Cause” means any involuntary termination of Executive’s employment by the Company other than a Termination For Cause, a Termination Due to Disability or a Termination Due to Death.

“Vested Benefits” means amounts that are vested or that Executive is otherwise entitled to receive, without the performance by Executive of further services or the resolution of a contingency, under the terms of or in accordance with any investment and savings plan or retirement plan (including any plan providing retiree medical benefits) of the Company of its affiliates, and any ERPs or ESPs related thereto, and any deferred compensation or employee stock purchase plan or similar plan or program of the Company of its affiliates.

“Vested Benefit Enhancements” means (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable Federal rate as determined under Section 1274(d) of the Internal Revenue Code of 1986, as amended (the “Code”), of the additional retirement benefits that would have been payable or available to Executive under any ERPs, based on (A) the age and service Executive would have attained or completed had Executive continued in the Company’s employ until the second anniversary of the date of termination of the Employment Period, and (B) where compensation is a relevant factor, his pensionable compensation as of such date, such compensation to include, on the same terms as apply to other executives, any Severance Payment made to Executive and (ii) solely for purposes vesting in any benefits under any ESPs, Executive shall be treated as having continued in the Company’s employ until the second anniversary of the date of termination of the Employment Period.

“Voluntary Termination” means any voluntary termination of Executive’s Employment by Executive pursuant to this Section 5, other than a Termination Due to Retirement or a Termination Due to Disability by Executive.

“Welfare Benefits Continuation” means that until the second anniversary of the date of termination of the Employment Period, Executive and, if applicable, his dependents shall be entitled to continue participation in the life and health insurance benefit plans of the Company or its affiliates in which Executive and/or such dependents were participating as of the date of termination of the Employment Period, and such other welfare benefit plans thereof in which the Company is required by law to permit the participation of Executive and/or his dependents, (collectively, the “Welfare Benefit Plans”). Such participation shall be on the same terms and conditions (including the requirement that Executive pay any premiums generally paid by an employee) as would apply if Executive were still in the employ of the Company; provided that the continued participation of Executive and/or his dependents in such Welfare Benefit Plans

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shall cease on such earlier date as Executive may become eligible for comparable welfare benefits provided by a subsequent employer. To the extent that Welfare Benefits Continuation cannot be provided under terms of the applicable plan, policy or program, the Company shall provide a comparable benefit under another plan or from the Company’s general assets.

6.

Termination Following a Change of Control or Potential Change of Control.

This Section 6 shall apply (instead of Section 5) during the period commencing upon a Change of Control and continuing until the third anniversary thereof; provided that, in the event that Executive’s employment is terminated by the Company in a Termination Without Cause after the occurrence of a Potential Change of Control and a Change of Control occurs within one year following the date of such termination, then solely for purposes of this Agreement, Executive shall be deemed to have remained in the Company’s employ until the occurrence of the Change of Control and thereafter to have then been terminated by the Company in a Termination Without Cause. As a result, Executive shall be entitled to receive the excess of (i) the benefits payable in the event of a Termination Without Cause under this Section 6, over (ii) the amount of any benefits payable to Executive under Section 5.

(a)	Early Termination of the Employment Period. Notwithstanding Section 1(b) hereof, the Employment Period shall end upon the earliest to occur of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination Within 180 Days, (iv) a Voluntary Termination After 180 Days, (v) a Termination For Good Reason, (vi) a Termination Due to Retirement, (vii) a Termination Due to Disability, or (viii) a Termination Due to Death.
(b)	Notice of Termination. Communication of termination under this Section 6 shall be made to the other party by Notice of Termination in the case of (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Voluntary Termination Within 180 Days, (iv) a Voluntary Termination After 180 Days, or (v) a Termination For Good Reason.
(c)	Benefits Payable Upon Termination; Rules for Determining Reason for Termination.

(i) Benefits Payable Upon Termination.

(A) Following the end of the Employment Period, Executive (or, in the event of his death, his surviving spouse, if any, or if none, his estate) shall be paid the type or types of compensation determined to be payable in accordance with the following table, such payment to be made in the form specified in such table and at the time established pursuant to Section 7 hereof. Capitalized terms used in such table (and otherwise in this Section 6) that are defined in Section 5, and not specifically defined in Section 6(d) hereof, shall have the meanings ascribed thereto under Section 5. Where such a capitalized term is defined solely in

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Section 6(d), or in both Section 5 and Section 6(d), such term shall have the meaning ascribed to it in Section 6(d).

(B)The Company’s obligation to make the payments provided for in this Section 6 and otherwise to perform its obligations under this Section 6 shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Section 6 and such amounts shall not be reduced whether or not Executive obtains other employment.

(ii) Rules for Determining Reason for Termination.

(A) No Termination Without Cause, Voluntary Termination Within 180 Days or Termination For Good Reason shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement under this Section 6, notwithstanding the fact that, either on, before or after the Date of Termination with respect thereto, (I) Executive was eligible for Retirement as defined in the Savings Plan, (II) Executive requested to be treated as a retiree for purposes of the Savings Plan or any other plan or program of the Company or its affiliates, or (III) Executive or the Company could have terminated Executive’s employment in a Termination Due to Disability hereunder.

(B) No Termination Due to Retirement shall be treated as a Voluntary Termination After 180 Days for purposes of this Section 6, notwithstanding the fact that the Date of Termination for such Termination Due to Retirement may occur within 180 days following a Change of Control.

(C) Notwithstanding any provision in this Agreement to the contrary, in the event of a Change of Control as described in clause (iii) or clause (iv) of the definition of the term Change of Control in Section 6(d) of this Agreement, if the employment of Executive involuntarily terminates on or after the date of a shareholder approval described in either of such clauses but before the date of a consummation described in either of such clauses, the date of termination of Executive’s employment shall be deemed for purposes of this Agreement to be the day following the date of the applicable consummation.

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BENFITS PAYABLE – CHANGE OF CONTROL

	Accrued	Pro Rata	Severance			Vested Benefits	Welfare Benefits
BENEFIT	Salary	Target Bonus	Payment	Equity Awards	Vested Benefits	Enhancement	Continuation
FORM OF PAYMENT	Lump Sum	Lump Sum	Lump Sum	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Lump Sum	Determined Under the Applicable Plan
Termination For Cause	Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Without Cause	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination Within 180 Days	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination After 180 Days	Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination For Good Reason	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Termination Due to Retirement	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Disability	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Death	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available

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(d)	Definitions.
	“Beneficial Owner” means any Person who, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” (within the meaning of Rule 13d-3 under the Securities and Exchange Act of 1934, as amended (the “Act”)) of any securities of a company, including any such right pursuant to any agreement, arrangement or understanding (whether or not in writing), provided that: (i) a Person shall not be deemed the Beneficial Owner of any security as a result of an agreement, arrangement or understanding to vote such security (A) arising solely from a revocable proxy or consent given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the Act and the applicable rules and regulations thereunder, or (B) made in connection with, or to otherwise participate in, a proxy or consent solicitation made, or to be made, pursuant to, and in accordance with, the applicable provisions of the Act and the applicable rules and regulations thereunder, in either case described in clause (A) or (B) above, whether or not such agreement, arrangement or understanding is also then reportable to such Person on Schedule 13D under the Act (or any comparable or successor report); and (ii) a Person engaged in business as an underwriter of securities shall not be deemed to be the Beneficial Owner of any security acquired through such Person’s participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition.
	“Change of Control” means:

(i) a report on Schedule 13D shall be filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Act disclosing that any Person, other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company is the Beneficial Owner of twenty percent or more of the outstanding stock of the Company entitled to vote in the election of directors of the Company;

(ii) any Person, other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) entitled to vote in the election of directors of the Company for cash, securities or any other consideration, provided that after consummation of the offer, the Person in question is the Beneficial Owner of fifteen percent or more of the outstanding stock of the Company entitled to vote in the election of directors of the Company (calculated as provided in paragraph (d) of Rule 13d-3 under the Act in the case of rights to acquire stock);

(iii) any merger, consolidation, recapitalization or reorganization of the Company approved by the stockholders of the Company shall be consummated, other than any such transaction immediately following which the persons who were the Beneficial Owners of

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the outstanding securities of the Company entitled to vote in the election of directors of the Company immediately prior to such transaction are the Beneficial Owners of at least 55% of the total voting power represented by the securities of the entity surviving such transaction entitled to vote in the election of directors of such entity (or the ultimate parent of such entity) in substantially the same relative proportions as their ownership of the securities of the Company entitled to vote in the election of directors of the Company immediately prior to such transaction; provided that, such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such threshold (or to preserve such relative voting power) is due soley to the acquisition of voting securities by an employee benefit plan of the Company, such surviving entity or any subsidiary of such surviving entity;

(iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company approved by the stockholders of the Company shall be consummated; or

(v) within any 24 month period, the persons who were directors of the Company immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to the Company, provided that any director who was not a director at the beginning of such a period shall be deemed to be an Incumbent Director if such director (A) was elected to the Board by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually or by prior operation of this clause (v), and (B) was not designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (iii) or (iv) of this definition of the term Change of Control in Section 6(d) of this Agreement.

"Date of Termination” means (i) in the case of a termination of the Employment Period for which a Notice of Termination is required, the date of receipt of such Notice of Termination or, if later, the date specified therein, as the case may be, or (ii) in all other cases, the actual date on which Executive’s employment terminates during the Employment Period.

“Not Payable” means that a particular benefit shall not be paid or otherwise provided to Executive.

“Not of Termination” means (i) in the case of a Termination For Cause, a written notice given by the Company to Executive, within 30 calendar days of the Company’s having actual knowledge of the events giving rise to such termination, (ii) in the case of a Termination Without Cause, a written notice given by the Company to Executive at least 30 calendar days before the effective date of such Termination Without Cause, (iii) in the case of a Voluntary Termination Within 180 Days or a Voluntary Termination After 180 Days, a written notice given by Executive to the Company at least 30 calendar days before the effective date of such termination, and (iv) in the

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case of a Termination For Good Reason, a written notice given by Executive to the Company within 180 days of Executive’s having actual knowledge of the events giving rise to such Termination For Good Reason, and which (A) indicates the specific termination provision in this Agreement relied upon, (B) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (C) if the termination date is other than the date of receipt of such notice, specifies the termination date of this Agreement (which date shall not be more than 15 days after the giving of such notice). The failure by Executive to set forth in such Notice of Termination any fact or circumstance that contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his rights hereunder.

“Payable” means that a particular benefit shall be paid to Executive in the amount, at the time, and in the form specified herein.

“Person” has the meaning ascribed to such term in Section 3(a)(9) of the Act, as supplemented by Section 13(d)(3) of the Act; provided, however, that Person shall not include (i) the Company, any subsidiary of the Company or any other Person controlled by the Company, (ii) any trustee or other fiduciary holding securities under any employee benefit of the Company or of any subsidiary of the Company, or (iii) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of securities of the Company.

“Potential Change of Control” means:

(i) a Person shall commence a tender offer, which if successfully consummated, would result in such Person being the Beneficial Owner of at least 15% of the stock of the Company entitled to vote in the election of directors of the Company;

(ii) the Company shall enter into an agreement the consummation of which shall constitute a Change of Control of the Company;

(iii) solicitation of proxies for the election of directors of the Company by anyone other than the Company, which, if such directors were elected, would result in the occurrence of a Change of Control described in Section 6(d) of this Agreement; or

(iv) any other events shall occur which is deemed to be a Potential Change of Control by the Board or the appropriate Committee thereof.

“Severance Payment” means a cash amount equal to three times the sum of (i) Executive’s Base Salary at the rate in effect as of the date on which the Employment Period terminates, and (ii) Executive’s Target Bonus for such year.

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“Termination For Cause” means the Company’s termination of Executive’s employment due to (i) Executive’s conviction of a felony; (ii) an act or acts of extreme dishonesty or gross misconduct on Executive’s part which result or are intended to result in material damage to the Company’s business or reputation; or (iii) repeated material violations by Executive of his obligations under Section 2 of this Agreement, which violations are demonstrably willful and deliberate on Executive’s part and which result in material damage to the Company’s business or reputation. Executive shall be permitted to respond and defend himself before the Board within 30 days after delivery to Executive of written notification of any proposed Termination for Cause which specifies in detail the reasons for such termination. If the majority of the members of the Board (excluding Executive) do not confirm that the Company had grounds for a Termination For Cause within 30 days after Executive has had his hearing before the Board, Executive shall have the option of treating his employment as not having terminated or as having been terminated pursuant to a Termination Without Cause.

“Termination For Good Reason” means the occurrence of any of the following after the occurrence of a Potential Change of Control or a Change of Control:

(i) (A) the assignment to Executive of any duties inconsistent in any material adverse respect with Executive’s position, duties, authority or responsibilities as contemplated by Section 2 of this Agreement, or (B) any other material adverse change in such position, including titles, authority or responsibilities;

(ii) any failure by the Company to comply with any of the provisions of Sections 3 and 4 of this Agreement at a level of least equal to that in effect immediately preceding the Change of Control or a Potential Change of Control, other than an insubstantial or inadvertent failure remedied by the Company promptly after receipt of notice thereof given by Executive;

(iii) the Company’s requiring Executive to be based at any office or location more than 25 miles from the location at which he performed his services specified under Section 2 hereof immediately prior to the Change of Control or a Potential Change of Control, except for travel reasonably required in the performance of Executive’s responsibilities;

(iv) any failure by the Company to obtain the assumption and agreement to perform this Agreement by a successor as contemplated by Section 10(d) hereof; or

(v) any attempt by the Company to terminate the Executive’s employment in a Termination For Cause that is determined by the Board pursuant to Section 5 hereof, or in a proceeding pursuant to Section 9 or Section 10 hereof, not to constitute a Termination For Cause.

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Notwithstanding the foregoing, a termination of Executive’s employment shall not be treated as a Termination For Good Reason (I) if Executive shall have consented in writing to the occurrence of the event giving rise to the claim of Termination For Good Reason, or (II) if Executive shall have delivered a Notice of Termination to the Company, and the facts and circumstances specified therein as provided a basis for such Termination For Good Reason are cured by the Company within 10 days of its receipt of such Notice of Termination.

“Vested Benefits Enhancement” means (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable Federal rate as determined under Section 1274(d) of the Internal Revenue Code of 1986, as amended (the “Code”), of the additional retirement benefits that would have been payable or available to Executive under any ERPs, based on (A) the age and service Executive would have attained or completed had Executive continued in the Company’s employ until the third anniversary of the occurrence of the Change of Control, and (B) where compensation is a relevant factor, his pensionable compensation as of the Date of Termination, such compensation to include, on the same terms as apply to the other executives, any Severance Payment made to Executive, (ii) solely for purposes of vesting in any benefits under any ESPs, Executive shall be treated as having continued in the Company’s employ until the third anniversary of the occurrence of such Change of Control, and (iii) solely for purposes of determining eligibility for retiree medical benefits under any retirement plan or any retiree welfare benefit plan, policy or program of the Company or its affiliates, and any ERPs related thereto, Executive shall be treated as having continued in the Company’s employ until the third anniversary of the occurrence of such Change of Control and to have retired on the last day of such period.

“Voluntary Termination Within 180 Days” means a termination of employment by Executive for any reason within the first 180 days following a Change of Control, and “Voluntary Termination After 180 Days” means a termination of employment by Executive other than a Termination For Good Reason, a Termination Due to Disability by Executive, or a Termination Due to Death within the remaining 2 years and 6 months following a Change of Control.

“Welfare Benefits Continuation” shall have the same meaning as that described in Section 5 hereof, except that the entitlement of Executive and/or his dependents to participation in the Welfare Benefit Plans shall continue until the third anniversary of the Date of Termination.

(e) Out-Placement Services. If the Employment Period terminated because of a Termination Without Cause or a Termination For Good Reason, Executive shall be entitled to out-placement services, provided by the Company or its designee at the Company’s expense, for twelve months following the Date of Termination, or such lesser period as the Executive may require such services.

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(f) Certain Further Payments by Company.

(i) Tax Reimbursement Payment. In the event that any amount or benefit paid or distributed to Executive pursuant to this Agreement, taken together with any amounts or benefits otherwise paid or distributed to Executive by the Company or any affiliate (collectively, the “Covered Payments”), are or become subject to the tax (the “Excise Tax”) imposed under Section 4999 of the Code, or any similar tax that may hereafter be imposed, the Company shall pay to the Executive at the time specified in this Section an additional amount (the “Tax Reimbursement Payment”) such that the net amount retained by the Executive with respect to such Covered Payments, after deduction of any Excise Tax on the Covered Payments and any Federal, state and local income tax and other tax on the Tax Reimbursement Payment provided for by this Section, but before deduction for any Federal, state or local income or employment tax withholding on such Covered Payments, shall be equal to the amount of the Covered Payments.

(ii) Applicable Rules. For purposes of determining whether any of the Covered Payments will be subject to the Excise Tax and the amount of such Excise Tax,

(A) such Covered Payments will be treated as “parachute payments” within the meaning of Section 280G of the Code, and all “parachute payments” in excess of the “base amount” (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the good faith judgment of the Company’s independent certified public accountants appointed prior to the earlier of: (I) the date on which a Potential Change of Control occurs, or (II) the date on which a Change of Control occurs, or tax counsel selected by such accountants (the “Accountants”), the Company has a reasonable basis to conclude that such Covered Payments (in whole or in part) either do not constitute “parachute payments” or represent reasonable compensation for personal services actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the “base amount,” or such “parachute payments” are otherwise not subject to such Excise Tax, and

(B) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Accountants in accordance with the principles of Section 280G of the Code.

(iii) Additional Rules. For purposes of determining the amount of the Tax Reimbursement Payment, the Executive shall be deemed to pay: (A) Federal income taxes at the highest applicable marginal rate of Federal income taxation for the calendar year in which the Tax Reimbursement Payment is to be made, and (B) any applicable state and local income and other taxes at the highest applicable marginal rate of taxation for the calendar year in which the Tax Reimbursement Payment is to be made, net of the maximum reduction in Federal

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incomes taxes which could be obtained from the deduction of such state and local taxes if paid in such year.

(iv) Repayment or Additional Payment in Certain Circumstances.

(A) Repayment. In the event that the Excise Tax is subsequently determined by the Accountants or pursuant to any proceeding or negotiations with the Internal Revenue Service to be less than the amount taken into account hereunder in calculating the Tax Reimbursement Payment made, Executive shall repay to the Company, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior Tax Reimbursement Payment that would not have been paid if such lesser Excise Tax had been applied in initially calculating such Tax Reimbursement Payment. Notwithstanding the foregoing, in the event any portion of the Tax Reimbursement Payment to be repaid to the Company has been paid to any Federal, state or local tax authority, repayment thereof shall not be required until actual refund of credit of such portion has been made to Executive by the applicable tax authority. Executive and the Company shall mutually agree upon the course of action to be pursued (and the method of allocating the expenses thereof) if Executive’s good faith claim for refund or credit is denied.

(B) Additional Tax Reimbursement Payment. In the event that the Excise Tax is later determined by the Accountants or pursuant to any proceeding or negotiations with the Internal Revenue Service to exceed the amount taken into account hereunder at the time the Tax Reimbursement Payment is made (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of the Tax Reimbursement Payment), the Company shall make an additional Tax Reimbursement Payment in respect of such excess (plus any interest or penalty payable with respect to such excess) at the time that the amount of such excess is finally determined.

(v) Timing for Tax Reimbursement Payment. The Tax Reimbursement Payment (or portion thereof) provided for in this Section 6 shall be paid to Executive not later than 10 business days following the payment of the Covered Payments; provided, however, that if the amount of such Tax Reimbursement Payment (or portion thereof) cannot be finally determined on or before the date on which payment is due, the Company shall pay to Executive by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than 45 calendar days after payment of the related Covered Payment. To the extent that the amount of the estimated Tax Reimbursement Payment exceeds the amount subsequently determined to have been due,

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Executive shall repay such excess to the Company on the fifth business day after written demand by the Company for payment.

7. Timing of Payments.

Accrued Salary, Severance Payments and Vested Benefits Enhancements shall be paid no later than 10 days following the termination of the Employment Period. Pro-Rata Target Bonus shall be paid as follows: (a) if the Employment Period terminates in the first, second or third calendar quarter of any particular calendar year, then the Pro-Rata Target Bonus shall be paid no later than 10 days following the termination of the Employment Period, or (b) if the Employment Period terminates in the fourth calendar quarter of any particular calendar year, then the Pro-Rata Target Bonus shall be paid no later than the same time as similar awards are paid to other executives participating in the plans or programs under which the awards are paid, but in no event later than March 31 of the calendar year following the end of such fourth calendar quarter. Vested Benefits and Equity Awards shall be paid no later than the time for payment Determined Under the Applicable Plan except as otherwise expressly superseded or modified by this Agreement. Tax Reimbursement Payments shall be paid at the time specified in Section 6 hereof. Notwithstanding the foregoing, solely for purposes of amounts payable pursuant to Section 5 hereof, if any amount payable to Executive pursuant to Section 5 would be nondeductible by the Company under Section 162(m) of the Code if paid in the year of Executive’s termination, the Company shall have the option of paying such nondeductible amount, with interest at the one-year treasury bill rate as in effect on the date of such termination as reported in the Wall Street Journal, on the first day of the second calendar quarter in the year following such termination.

8. Full Discharge of Company Obligations.

Except in the case of amounts payable to Executive in the event of a termination of employment following a Potential Change of Control as described in the first paragraph of Section 6, and except as expressly provided in the last sentence of this Section 8, the amounts payable to Executive pursuant to Section 5 following termination of his employment (including amounts payable with respect to Vested Benefits) shall be in full and complete satisfaction of Executive’s rights under Section 5 of this Agreement and any other claims he may have in respect of his employment by the Company or any of its affiliates. Such amounts shall constitute liquidated damages with respect to any and all such rights and claims and, upon Executive’s receipt of such amounts, the Company shall be released and discharged from any and all liability to Executive in connection with Section 5 of this Agreement or otherwise in connection with Executive’s employment with the Company and its affiliates. In no event shall Executive be obligated to seek other employment or take any action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not Executive obtains other employment. Nothing in this Section 8 shall be construed to release the Company from its obligation to indemnify Executive as provided in Section 4(e) hereof.

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9. Noncompetition, Confidentiality and Other Covenants.

By and in consideration of the compensation and benefits to be provided by the Company hereunder, including the severance arrangements set forth herein, Executive agrees to the following:

(a) Noncompetition. During the Employment Period and until the earlier of: (i) the last day of the one year period following any Voluntary Termination of the Employment Period by Executive pursuant to Section 5 hereof, or (ii) the date a Change of Control occurs (the “Restriction Period”), Executive shall not become associated with any entity, whether as a principal, partner, employee, agent, consultant, shareholder (other than as a holder, or a member of a group which is a holder, of not in excess of 1% of the outstanding voting shares of any publicly traded company) or in any other relationship or capacity, paid or unpaid, that is actively engaged in any geographic area in any business which is in competition with the business of the Company. Notwithstanding anything herein to the contrary, the terms of this Section 9(a) shall not apply in the event of any termination of employment following a Change of Control as provided for in Section 6 of this Agreement, including any termination following a potential Change of Control as described in the first paragraph of Section 6.

(b) Confidentiality. Without the prior written consent of the Company, except to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency, Executive shall not disclose to any third person, or permit the use of for the benefit of any person or any entity other than The Company or its affiliates, any trade secrets, customer lists, information regarding product development, marketing plans, sales plans, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, financial records, or other financial, organizational, commercial, business, sales, marketing, technical, product or employee information relating to the Company or its affiliates or information designated as confidential, proprietary, and/or a trade secret, or any other information relating to the Company or its affiliates that Executive knows from the circumstances, in good faith and good conscience, should be treated as confidential, or any information that the Company or its affiliates may receive belonging to customers, agents or others who do business with the Company or its affiliates, except to the extent that any such information previously has been disclosed to the public by the Company or is in the public domain (other than by reason of Executive’s violation of this Section 9(b)).

(c) Non-Solicitation of Employees. During the Employment Period and

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until the earlier of: (i) the last day of the one year period following any Voluntary Termination of the Employment Period by Executive pursuant to Section 5 hereof, (ii) the first anniversary of the date this Agreement expires by reason of either party delivering to the other a notice of non-renewal pursuant to Section 1(b) hereof, or (iii) the date a Change of Control occurs, Executive shall not directly or indirectly solicit, encourage or induce any employee of the Company or its affiliates to terminate employment with such entity, and shall not directly or indirectly, either individually or as owner, agent, employee, consultant or otherwise, employ or offer employment to any person who is or was employed by the Company or an affiliate thereof unless such person shall have ceased to be employed by such entity for a period of at least six months. Notwithstanding anything herein to the contrary, the terms of this Section 9(c) shall not apply in the event of any termination of employment following a Change of Control as provided for in Section 6 of this Agreement, including any termination following a potential Change of Control as described in the first paragraph of Section 6.

(d) Non-Solicitation of Clients and Customers. During the Employment Period and until the earlier of (i) the last day of the one year period following any Voluntary Termination of the Employment Period by Executive pursuant to Section 5 hereof, (ii) the first anniversary of the date this Agreement expires by reason of either party delivering to the other a notice of non-renewal pursuant to Section 1(b) hereof, or (iii) the date a Change of Control occurs, Executive shall not directly or indirectly solicit, encourage or induce any person or entity which is (or, at the date of Executive’s termination of employment, or at the date of the expiration of this Agreement, or at the date a Change of Control occurs, as applicable, was) a client or customer of the Company or any of its affiliates to terminate or reduce in any material way its relationship with the Company or any such affiliate, or otherwise attempt to divert the business of any such client or customer from the Company or any of its affiliates. Notwithstanding anything herein to the contrary, the terms of this Section 9(d) shall not apply in the event of any termination of employment following a Change of Control as provided for in Section 6 of this Agreement, including any termination following a potential Change of Control as described in the first paragraph of Section 6.

(e) Company Property. Except as expressly provided herein, promptly following any termination of the Employment Period, Executive shall return to the Company all property of the Company, and all copies thereof in Executive’s possession or under his control.

(f) Injunctive Relief and Other Remedies with Respect to Covenants. Executive acknowledges and agrees that the covenants and obligations of Executive with respect to noncompetition, confidentiality, nonsolicitation of employees, nonsolicitation of clients and customers, and Company property relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, Executive

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agrees that the Company (i) shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) restraining Executive from committing any violation of the covenants and obligations contained in this Section 9, and (ii) shall have no further obligation to make any payments to Executive hereunder following any material violation of the covenants and obligations contained in this Section 9. These remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity. In connection with the foregoing provisions of this Section 9, Executive represents that his economic means and circumstances are such that such provisions will not prevent him from providing for himself and his family on a basis satisfactory to him. Notwithstanding the foregoing, in no event shall an asserted violation of the provisions of this Section constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement following a Change of Control.

10. Miscellaneous.

(a) Survival. All of the provisions of Section 5 (relating to termination of the Employment Period prior to a Change of Control), 6 (relating to termination of the Employment Period following a Change of Control or a Potential Change of Control), 9 (relating to noncompetition, confidentiality, nonsolicitation of employees, nonsolicitation of clients and customers, and Company property), 10(b) (relating to arbitration), 10(c) (relating to legal fees and expenses) and 10(n) (relating to governing law) of this Agreement shall survive the termination of this Agreement.

(b) Arbitration. Except as provided in Section 9, any dispute or controversy arising under or in connection with this Agreement shall be resolved by binding arbitration. Such arbitration shall be held in the city of Hartford, Connecticut and except to the extent inconsistent with this Agreement, shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect at the time of the arbitration, and otherwise in accordance with the principles that would be applied by a court of law or equity. The arbitrator shall be acceptable to both the Company and Executive. If the parties cannot agree on an acceptable arbitrator, the dispute or controversy shall be heard by a panel of three arbitrators; one appointed by each of the parties and the third appointed by the other two arbitrators. The Company and Executive further agree that they will abide by and perform any award or awards rendered by the arbitrators and that a judgment may be entered on any award or awards rendered by any state or federal court having jurisdiction over the Company or Executive or any of their respective property.

(c) Legal Fees and Expenses. In any contest (whether initiated by Executive or by the Company) as to the validity, enforceability or interpretation of any provision of this Agreement, the Company shall pay Executive’s legal expenses (or cause such expenses to be paid) including, without limitation, his

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reasonable attorney’s fees, on a quarterly basis, upon presentation of proof of such expenses in a form acceptable to the Company, provided that Executive shall reimburse the Company for such amounts, plus simple interest thereon at a 90-day United States Treasury Bill rate as in effect from time to time, compounded annually, if Executive shall not prevail, in whole or in part, as to any material issue as to the validity, enforceability or interpretation of any provision of this Agreement.

(d) Successors; Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Company and its successors. The Company shall require any successor to all or substantially all of the business and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform the Agreement if no such succession had taken place. This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by Executive otherwise than by will or the law of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

(e) Assignment. Except as provided in Section 10(d), neither this Agreement nor any of the rights or obligations hereunder shall be assigned or delegated by any party hereto without the prior written consent of the other party.

(f) Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the matters referred to herein. This Agreement supersedes and replaces any prior employment or severance agreement or arrangement between the Company and Executive. No other agreement relating to the terms of Executive’s employment by the Company, oral or otherwise, shall be binding between the parties unless it is in writing and signed by the party against whom enforcement is sought. There are no promises, representations, inducements or statements between the parties other than those that are expressly contained herein. Executive acknowledges that he is entering into this Agreement of his own free will and accord, and with no duress, and that he has read this Agreement and that he understands it and its legal consequences.

(g) Severability; Reformation. In the event that one or more of the provisions of this Agreement shall become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. In the event of a determination that any of the provisions of Section 9(a), Section 9(b), Section 9(c), or Section 9(d) are not enforceable in accordance with their terms, Executive and the Company agree that such Section shall be reformed to make such Section enforceable in a manner that provides the Company the maximum rights permitted at law.

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(h) Waiver. Waiver by any party hereto of any breach or default by the other party of any of the terms of this Agreement shall not operate as a waiver of any other breach or default, whether similar to or different from the breach or default waived. No waiver of any provision of this Agreement shall be implied from any course of dealing between the parties hereto or from any failure by either party to assert its or his rights hereunder on any occasion or series of occasions.

(i) Notices. Any notice required or desired to be delivered under this Agreement shall be in writing and shall be delivered personally, by courier service, by registered mail, return receipt requested, or by telecopy and shall be effective upon actual receipt by the party to which such notice shall be directed, and shall be addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):

If to Company:	The Hartford Financial Services Group, Inc.
	Law Department, HO-1-09
	Hartford Plaza
	Hartford, CT 06115
	Attention: Corporate Secretary
with a copy to:	Debevoise & Plimpton
	875 Third Avenue
	New York, NY 10022
	Attn: Lawrence K. Cagney, Esq.
If to Executive:	The home address of Executive
	shown on the records of the Company

(j) Amendments. This Agreement may not be altered, modified or amended except by a written instrument signed by each of the parties hereto.

(k) Headings. Headings to provisions of this Agreement are for the convenience of the parties only and are not intended to be part of or to affect the meaning or interpretation hereof.

(l) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(m) Withholding. Any payments provided for herein shall be reduced by any amounts required to be withheld by the Company from time to time under applicable Federal, State or local income or employment tax laws or similar statutes or other provisions of law then in effect.

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(n) Governing Law. This Agreement shall be governed by the laws of the State of Connecticut, without reference to principles of conflicts or choice of law under which the law of any other jurisdiction would apply.

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EX-10.07

Exhibit 10.07

KEY EXECUTIVE EMPLOYMENT PROTECTION AGREEMENT

     THIS AGREEMENT, dated as of [date], by and between The Hartford Financial Services Group, Inc., a Delaware corporation (the “Company”), and [name] (“Executive”).

W I T N E S S E T H :

     WHEREAS, the Company and/or one or more subsidiaries thereof (the “Subsidiaries”) have employed Executive in an officer position and have determined that Executive holds an important position with the Company;

     WHEREAS, the Company believes that, in the event it is confronted with a situation that could result in a change in ownership or control of the Company, continuity of management will be essential to its ability to evaluate and respond to such situation in the best interests of shareholders;

     WHEREAS, the Company understands that any such situation will present significant concerns for Executive with respect to Executive’s financial and job security;

     WHEREAS, the Company desires to assure itself of Executive’s services during the period in which it is confronting such a situation, and to provide Executive with certain financial assurances to enable Executive to perform the responsibilities of Executive’s position without undue distraction and to exercise judgment without bias due to Executive’s personal circumstances; and

     WHEREAS, to achieve these objectives, the Company and Executive desire to enter into an agreement providing the Company and Executive with certain rights and obligations upon the occurrence of a Change of Control or Potential Change of Control (as defined in Section 2 hereof).

          NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is hereby agreed by and between the Company and Executive as follows:

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1. Operation of Agreement.

(a) Effective Date. The effective date of this Agreement (the “Effective Date”) shall be the earlier of: (i) the date on which a Potential Change of Control occurs, or (ii) the date on which a Change of Control occurs; provided that if Executive is not actively employed by the Company on the Effective Date, this Agreement shall be void and without effect.

(b) Termination Following a Potential Change of Control. Consonant with Section 1(a), in the event that Executive’s employment is terminated by the Company or the Subsidiaries in a Termination Without Cause or is terminated by Executive in a Termination For Good Reason (as defined herein) after the occurrence of a Potential Change of Control, and a Change of Control occurs within one year following the date of such Termination Without Cause or Termination For Good Reason, then solely for purposes of this Agreement, Executive shall be deemed to have remained in the employ of the Company and/or the Subsidiaries until the occurrence of such Change of Control and to have then been terminated by the Company and/or the Subsidiaries in a Termination Without Cause, and Executive shall be entitled to receive the benefits payable under Section 7 of this Agreement, but reduced by any amounts paid to Executive by the Company and/or the Subsidiaries on account of the termination of Executive’s employment prior to the occurrence of such Change of Control.

2. Certain Applicable Definitions.

(a) Beneficial Owner. For purposes of this Agreement, “Beneficial Owner” means any Person who, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” (within the meaning of Rule 13d-3 under the Securities and Exchange Act of 1934, as amended (the “Act”)) of any securities of a company, including any such right pursuant to any agreement, arrangement or understanding (whether or not in writing), provided that: (i) a Person shall not be deemed the Beneficial Owner of any security as a result of an agreement, arrangement or understanding to vote such security (A) arising solely from a revocable proxy or consent given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the Act and the applicable rules and regulations thereunder, or (B) made in connection with, or to otherwise participate in, a proxy or consent solicitation made, or to be made, pursuant to, and in accordance with, the applicable provisions of the Act and the applicable rules and regulations thereunder, in either case described in clause (A) or (B) above, whether or not such agreement, arrangement or understanding is also then reportable by such Person on Schedule 13D under the Act (or any comparable or successor report); and (ii) a Person engaged in business as an underwriter of securities shall not be

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deemed to be the Beneficial Owner of any security acquired through such Person’s participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition.

(b) Change of Control. For purposes of this Agreement, “Change of Control” means:

(i) a report on Schedule 13D shall be filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Act disclosing that any Person, other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company is the Beneficial Owner of twenty percent or more of the outstanding stock of the Company entitled to vote in the election of directors of the Company;

(ii) any Person, other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) for cash, securities or any other consideration, provided that after consummation of the offer, the Person in question is the Beneficial Owner of fifteen percent or more of the outstanding stock of the Company entitled to vote in the election of directors of the Company (calculated as provided in paragraph (d) of Rule 13d-3 under the Act in the case of rights to acquire stock);

(iii) any merger, consolidation, recapitalization or reorganization of the Company approved by the stockholders of the Company shall be consummated, other than any such transaction immediately following which the persons who were the Beneficial Owners of the outstanding securities of the Company entitled to vote in the election of directors of the Company immediately prior to such transaction are the Beneficial Owners of at least 55% of the total voting power represented by the securities of the entity surviving such transaction entitled to vote in the election of directors of such entity (or the ultimate parent of such entity) in substantially the same relative proportions as their ownership of the securities of the Company entitled to vote in the election of directors of the Company immediately prior to such transaction; provided that, such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such threshold (or to preserve such relative voting power) is due solely to the acquisition of voting securities by an employee benefit plan of the Company, such surviving entity or any subsidiary of such surviving entity;

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(iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company approved by the stockholders of the Company shall be consummated; or

(v) within any 24 month period, the persons who were directors of the Company immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the board of directors of the Company (the “Board”) or the board of directors of any successor to the Company, provided that any director who was not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director (A) was elected to the Board by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually or by prior operation of this clause (v), and (B) was not designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (iii) or clause (iv) of Section 2(b)of this Agreement.

(c) Person. For purposes of this Agreement, “Person” has the meaning ascribed to such term in Section 3(a)(9) of the Act, as supplemented by Section 13(d)(3) of the Act; provided, however, that Person shall not include: (i) the Company, any subsidiary of the Company or any other Person controlled by the Company, (ii) any trustee or other fiduciary holding securities under any employee benefit plan of the Company or of any subsidiary of the Company, or (iii) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of securities of the Company.

(d) Potential Change of Control. For purposes of this Agreement, “Potential Change of Control” means:

(i) a Person shall commence a tender offer, which if successfully consummated, would result in such Person being the Beneficial Owner of at least 15% of the stock of the Company entitled to vote in the election of directors of the Company;

(ii) the Company shall enter into an agreement, the consummation of which shall constitute a Change of Control;

(iii) solicitation of proxies for the election of directors of the Company by anyone other than the Company, which, if such directors were elected, would result in the occurrence of a Change of Control described in Section 2(b) of this Agreement; or

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(iv) any other event shall occur which is deemed to be a Potential Change of Control by the Board or the appropriate committee thereof.

3. Employment Period.

Subject to Section 7 of this Agreement, the Company agrees to continue Executive in the employ of the Company and/or the Subsidiary, and Executive agrees to remain in the employ thereof of the Company, for the period commencing on the Effective Date and ending on the third anniversary of the date on which a Change of Control occurs (the “Employment Period”). Notwithstanding the foregoing, if, prior to the Effective Date, Executive is demoted to a position lower than the position held by Executive as of the date first above written, or is otherwise determined by the chairman of the Company (the “Chairman”) prior to the Effective Date to hold a position inappropriate for coverage under this Agreement, this Agreement shall be void and without effect, unless the Board, any appropriate committee thereof, or the Chairman declares that this Agreement shall continue in effect by written notice delivered to Executive within 60 days following such demotion or determination.

4. Position and Duties.

(a) No Reduction in Position. During the Employment Period, Executive’s position (including titles and tier), authority and responsibilities shall be at least commensurate with those held, exercised and assigned immediately prior to the Effective Date. It is understood that, for purposes of this Agreement, such position, authority and responsibilities shall not be regarded as not commensurate merely by virtue of the fact that a successor shall have acquired all or substantially all of the business and/or assets of the Company as contemplated by Section 10(d) of this Agreement.

(b) Business Time. On and after the Effective Date, Executive agrees to devote full attention during normal business hours to the business and affairs of the Company and to use best efforts to perform faithfully and efficiently the responsibilities assigned to Executive hereunder, to the extent necessary to discharge such responsibilities, except for: (i) time spent (A) serving on the board of directors of any business corporation with the consent of the Board, any appropriate committee of the Board, or the Chairman, (B) serving on the board of, or working for, any charitable or community organization (with the consent of the Board, any appropriate committee of the Board, or the Chairman if any such service or work is to be performed during normal business hours), or (C) pursuing Executive’s personal financial and legal affairs, so long as the foregoing activities, individually or collectively, do not substantially interfere with the performance of Executive’s responsibilities hereunder or violate any of the provisions of Section

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10 hereof, and (ii) periods of vacation, sick leave or other leave to which Executive is entitled under the programs and policies of the Company that apply to similarly situated executives. It is expressly understood and agreed that Executive’s continuing to serve on any boards and committees on which Executive is serving or with which Executive is otherwise associated immediately preceding the Effective Date shall not be deemed to interfere substantially with the performance of Executive’s responsibilities hereunder.

5. Compensation.

(a) Base Salary. During the Employment Period, the Company and/or the Subsidiaries shall pay Executive a base salary at an annual rate no less than the annual rate in effect immediately prior to the Effective Date. Such base salary shall be reviewed at least once during each calendar year of the Employment Period, and may be increased at any time and from time to time by action of the Board or any appropriate committee thereof or any individual having authority to take such action in accordance with the Company’s regular practices, but shall not be reduced below the annual rate in effect immediately prior to the Effective Date. Executive’s base salary, as it may be increased from time to time, shall be referred to herein as “Base Salary.” Neither the Base Salary nor any increase in Base Salary after the Effective Date shall serve to limit or reduce any obligation of the Company hereunder.

(b) Annual Bonus. For each calendar year ending during the Employment Period, Executive shall have the opportunity to earn and receive an annual bonus, based on the achievement of target levels of performance, equal to no less than the percentage of Executive’s Base Salary used to calculate such bonus immediately prior to the Effective Date. Executive’s annual bonus opportunity, as it may be increased from time to time during the Employment Period, shall be referred to herein as “Target Bonus.” The actual bonus, if any, payable for any calendar year during the Employment Period shall be determined in accordance with the terms of the Company’s Annual Executive Bonus Program or any successor annual incentive plan (the “Annual Plan”) based upon the performance of the Company and/or its applicable affiliates and/or Executive against target objectives established under such Annual Plan. Subject to Executive’s election to defer all or a portion of any annual bonus payable hereunder pursuant to the terms of any deferred compensation, deferred restricted stock or savings plan or other similar arrangement maintained or established by the Company or its affiliates and made available to Executive, any annual bonus payable under this Section 5(b) shall be paid to Executive in accordance with the terms of the Annual Plan.

(c) Long-term Incentive Compensation. During the Employment Period, Executive shall participate in all of the Company’s existing and future long-term incentive compensation programs for key executives at a level commensurate with

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Executive’s participation in such programs immediately prior to the Effective Date, or, if more favorable to the Executive, at the level made available to Executive or other similarly situated executives at any time thereafter.

6. Benefits, Perquisites and Expenses.

(a) Benefits. During the Employment Period, Executive (and, to the extent applicable, his or her dependents) shall be entitled to participate in or be covered under: (i) each welfare benefit plan maintained or as hereafter amended or established by the Company or its applicable affiliates, including, without limitation, each group life, hospitalization, medical, dental, health, accident or disability insurance or similar plan or program thereof, and (ii) each pension, retirement, savings, deferred compensation, deferred restricted stock, stock purchase or other similar plan or program maintained or as hereafter amended or established by the Company or its applicable affiliates, in each case at a level commensurate with the Executive’s participation in such plans or programs immediately prior to the Effective Date, or, if more favorable to the Executive, at the level made available to Executive or other similarly situated executives at any time thereafter.

(b) Perquisites. For each calendar year during the Employment Period, Executive shall be entitled to no less than the number of paid vacation days per year that Executive was entitled to immediately prior to the Effective Date, and shall also be entitled to receive such other perquisites commensurate with those generally provided to Executive immediately prior to the Effective Date, or, if more favorable to the Executive, at the level made available from time to time to Executive or other similarly situated executives at any time thereafter.

(c) Business Expenses. During the Employment Period, the Company shall pay or reimburse Executive for all reasonable business expenses incurred or paid by Executive in the performance of Executive’s duties, upon presentation of expense statements or vouchers and such other information as the Company may require and in accordance with the generally applicable policies and procedures of the Company as in effect immediately prior to the Effective Date, or, if more favorable to the Executive, in accordance with the policies and procedures in effect at any time thereafter.

(d) Office and Support Staff. During the Employment Period, Executive shall be entitled to an office with furnishings and other material appointments, and to secretarial and other assistance, at a level commensurate with the foregoing provided immediately prior to the Effective Date, or, if more favorable to the Executive, in accordance with the policies and procedures in effect at any time thereafter.

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(e) Indemnification. The Company shall indemnify Executive and hold Executive harmless from and against any claim, loss or cause of action, regardless whether asserted during or after the Employment Period, arising from or out of Executive’s performance as an officer, director or employee of the Company or any of its affiliates or in any other capacity, including any fiduciary capacity, in which Executive serves at the request of the Company, to the maximum extent permitted by applicable law and under the Certificate of Incorporation and By-Laws of the Company, as may be amended from time to time (the “Governing Documents”), provided that in no event shall the protection afforded to Executive be less than that afforded under the Governing Documents as in effect immediately prior to the Effective Date.

7. Early Termination of the Employment Period.

(a) Termination. Notwithstanding Section 3 hereof, the Employment Period shall end upon the earliest to occur of: (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Termination For Good Reason, (iv) a Voluntary Termination, (v) a Termination Due to Retirement, (vi) a Termination Due to Disability, or (vii) a Termination Due to Death.

(b) Notice of Termination. Communication of termination of the Employment Period shall be made to the other party by Notice of Termination (as defined in this Section 7) in the case of: (i) a Termination For Cause, (ii) a Termination Without Cause, (iii) a Termination For Good Reason, or (iv) a Voluntary Termination.

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(c) Benefits Payable Upon Termination; Rules for Determining Reason for Termination.

(i) Benefits Payable Upon Termination.

(A) Following the end of the Employment Period, Executive (or in the event of the Executive’s death, his or her surviving spouse, if any, or if none, his or her estate) shall be paid the type or types of compensation determined to be payable in accordance with the following table, such payment to be made in the form specified in such table and at the time established pursuant to Section 8 hereof. Capitalized terms used in such table shall have the meanings set forth in Section 7(d) hereof.

(B) The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not Executive obtains other employment.

(ii) Rules for Determining Reason for Termination.

(A) No Termination Without Cause or Termination For Good Reason shall be treated as a Termination Due to Retirement or a Termination Due to Disability for purposes of any Pro Rata Target Bonus, Severance Payment, Equity Awards or Vested Benefits Enhancement, notwithstanding the fact that, either on, before or after the Date of Termination with respect thereto, (I) Executive was eligible for Retirement as defined in The Hartford Investment and Savings Plan, as may be amended from time to time, or any successor plan thereof (the “Savings Plan”), (II) Executive requested to be treated as a retiree for purposes of the Savings Plan or any other plan or program of the Company or its affiliates, or (III) Executive or the Company could have terminated Executive’s employment in a Termination Due to Disability hereunder.

(B) No Termination Due to Retirement shall be treated as a Voluntary Termination.

(C) Notwithstanding any provision in this Agreement to the contrary, in the event of a Change of Control as described in Section 2(b)(iii) or Section 2(b)(iv) hereof, if the employment of Executive involuntarily terminates on or after the date of a shareholder approval described in either of such Sections but before the date of a consummation described in either of such Sections, the date of termination of Executive’s employment shall be deemed for purposes of this Agreement to be the day following the date of the applicable consummation.

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BENEFITS PAYABLE

		Pro Rata					Welfare
		Target	Severance			Vested Benefits	Benefits
BENEFIT	Accrued Salary	Bonus	Payment	Equity Awards	Vested Benefits	Enhancement	Continuation
							Determined
FORM OF			Lump	Determined Under	Determined Under		Under the
PAYMENT	Lump Sum	Lump Sum	Sum	the Applicable Plan	the Applicable Plan	Lump Sum	Applicable Plan
Termination For Cause	Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Without Cause	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Termination For Good Reason	Payable	Payable	Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Payable	Available
Voluntary Termination	Payable	Not Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available
Termination Due to Retirement	Payable	Determined Under the Applicable Plan	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Disability	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Available
Termination Due to Death	Payable	Payable	Not Payable	Determined Under the Applicable Plan	Determined Under the Applicable Plan	Not Payable	Not Available

(d) Definitions. For purposes of this Agreement, the following capitalized terms used herein shall have the following meanings:

“Accrued Salary” means Base Salary earned, but unpaid, for services rendered to the Company and/or the Subsidiaries on or prior to the Date of Termination (other than Base Salary deferred pursuant to Executive’s election under the terms of any applicable Company plan or program), plus any vacation pay accrued by Executive as of such date.

“Available” means that a particular benefit shall be made available to Executive to the extent specifically provided herein or required by applicable law.

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“Date of Termination” means: (i) in the case of a termination for which a Notice of Termination is required, the date of receipt of such Notice of Termination, or, if later, the date specified therein, as the case may be, or (ii) in all other cases, the actual date on which Executive’s employment terminates during the Employment Period.

“Determined Under the Applicable Plan” means that the determination of whether a particular benefit shall or shall not be paid to Executive, and, where specifically provided by this Agreement, the timing or form of any benefit payment, shall be made solely by application of the terms of the plan or program providing such benefit, except to the extent that the terms of such plan or program are expressly superseded or modified by this Agreement.

“Equity Awards” means the outstanding stock option, restricted stock, deferred restricted stock, performance share, performance unit, and other equity or long-term incentive compensation awards, if any, held by Executive as of the Date of Termination.

“ERPs” means any excess retirement plans maintained or as hereafter amended or established by the Company or its applicable affiliates.

“ESPs” means any excess investment and savings plans maintained or as hereafter amended or established by the Company or its applicable affiliates.

“Lump Sum” means a single lump sum cash payment.

“Not Available” means that the particular benefit shall not be made available to Executive, except to the extent required by applicable law.

“Not Payable” means that the particular benefit shall not be paid or otherwise provided to Executive.

“Notice of Termination” means: (i) in the case of a Termination For Cause, a written notice given by the Company to Executive, within 30 calendar days of the Company’s having actual knowledge of the events giving rise to such Termination For Cause, (ii) in the case of a Termination Without Cause, a written notice given by the Company to Executive at least 30 calendar days before the effective date of such Termination Without Cause, (iii) in the case of a Termination For Good Reason, a written notice given by Executive to the Company within 180 days of Executive’s having actual knowledge of the events giving rise to such Termination For Good Reason, and which (A) indicates the specific termination provision in this Agreement relied upon, (B) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (C) if the applicable Date of Termination is other than the date of receipt of such notice, specifies such Date of

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Termination (which date shall be not more than 15 days after the giving of such notice), provided that the failure by Executive to set forth in such Notice of Termination any fact or circumstance that contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his or her rights hereunder, or (iv) in the case of a Voluntary Termination, a written notice given by Executive to the Company at least 30 calendar days before the Date of Termination specified therein.

“Payable” means that a particular benefit shall be paid to Executive in the amount, at the time, and in the form specified herein.

“Pro-Rata Target Bonus” means an amount equal to the product of: (i) Executive’s Target Bonus under Section 5(b) for the calendar year in which the Date of Termination occurs, multiplied by (ii) a fraction (the “Service Fraction”), the numerator of which is equal to the number of rounded months (rounded to the nearest number of whole months) in such calendar year which have elapsed as of such Date of Termination, and the denominator of which is 12; provided that, if the Date of Termination occurs in the last quarter of any calendar year, Pro-Rata Target Bonus shall mean the amount determined under the foregoing formula or, if greater, the product of: (A) the bonus that would have been paid to Executive based on actual performance for such calendar year, multiplied by (B) the Service Fraction.

“Severance Payment” means a cash amount equal to two times the sum of: (i) Executive’s Base Salary at the rate in effect as of the Date of Termination, plus (ii) Executive’s Target Bonus amount under Section 5(b) hereof for the calendar year in which the Date of Termination occurs.

“Termination Due to Death” means a termination of Executive’s employment due to the death of Executive.

“Termination Due to Disability” means: (i) a termination of Executive’s employment by the Company as a result of a determination by the Board, the appropriate committee thereof or the Chairman that Executive has been incapable of substantially fulfilling the positions, duties, responsibilities and obligations set forth in this Agreement on account of physical, mental or emotional incapacity resulting from injury, sickness or disease for a period of (A) at least four consecutive months, or (B) more than six months in any twelve month period, or (ii) Executive’s termination of employment on account of Disability as defined in the Savings Plan.

“Termination Due to Retirement” means Executive’s termination of employment on account of Executive’s Retirement as defined in the Savings Plan.

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“Termination For Cause” means the Company’s termination of Executive’s employment due to: (i) Executive’s conviction of a felony, (ii) an act or acts of extreme dishonesty or gross misconduct on Executive’s part which result or are intended to result in material damage to the Company’s business or reputation, or (iii) repeated material violations by Executive of his or her obligations under Section 4 of this Agreement, which violations are demonstrably willful and deliberate on the Executive’s part and which result in material damage to the Company’s business or reputation.

“Termination For Good Reason” means the occurrence of any of the following after the occurrence of a Potential Change of Control or a Change of Control:

(i) (A) the assignment to Executive of any duties inconsistent in any material adverse respect with Executive’s position, including titles, duties, authority or responsibilities as contemplated by Section 4 of this Agreement, or (B) any other material adverse change in such position, including titles, duties, authority or responsibilities;

(ii) any failure by the Company and/or the Subsidiaries to comply with any of the provisions of Sections 5 and 6 of this Agreement at a level of least equal to that in effect immediately preceding such Change of Control or Potential Change of Control, other than an insubstantial or inadvertent failure remedied by the Company and/or the Subsidiaries promptly after receipt of notice thereof given by Executive;

(iii) the Company’s requiring Executive to be based at any office or location more than 25 miles from the location at which Executive performed the services specified under Section 4 hereof immediately prior to such Change of Control or Potential Change of Control, except for travel reasonably required in the performance of Executive’s responsibilities;

(iv) any failure by the Company to obtain the assumption and agreement to perform this Agreement by a successor as contemplated by Section 11(d); or

(v) any attempt by the Company and/or the Subsidiaries to terminate Executive’s employment in a Termination For Cause that is determined in a proceeding pursuant to Section 9 or Section 10 hereof not to constitute a Termination For Cause.

Notwithstanding the foregoing, a termination of Executive’s employment shall not be treated as a Termination For Good Reason (I) if Executive shall have consented in writing to the occurrence of the event giving rise to the claim of Termination For Good Reason, or (II) if Executive shall have delivered a Notice of

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Termination to the Company, and the facts and circumstances specified therein as providing a basis for such Termination For Good Reason are cured by the Company within 10 days of its receipt of such Notice of Termination.

“Termination Without Cause” means any involuntary termination of Executive’s employment by the Company and/or the Subsidiaries, other than a Termination For Cause, a Termination Due to Disability by the Company or a Termination Due to Death.

“Vested Benefits” means amounts that are vested or that Executive is otherwise entitled to receive, without the performance by Executive of further services or the resolution of a contingency, under the terms of or in accordance with any investment and savings plan or retirement plan (including any plan providing retiree medical benefits) of the Company or its affiliates, and any ERPs or ESPs related thereto, and any deferred compensation or employee stock purchase plan or similar plan or program of the Company or its affiliates.

“Vested Benefits Enhancement” means: (i) a cash amount equal to the present value, calculated using a discount rate equal to the then prevailing applicable Federal rate as determined under Section 1274(d) of the Internal Revenue Code of 1986, as amended (the “Code”), of the additional retirement benefits that would have been payable or available to Executive under any ERPs, based on (A) the age and service Executive would have attained or completed had Executive continued in the employ of the Company and/or the Subsidiaries until the second anniversary of the Date of Termination, and (B) where compensation is a relevant factor, Executive’s pensionable compensation as of such Date of Termination, such compensation to include, on the same terms as apply to other executives, any Severance Payment made to Executive, (ii) solely for purposes of vesting in any benefits under any ESPs, Executive shall be treated as having continued in the employ of the Company and/or the Subsidiaries until the second anniversary of such Date of Termination, and (iii) solely for purposes of determining eligibility for retiree medical benefits under any retirement plan or any retiree welfare benefit plan, policy or program of the Company or its affiliates, and any ERPs related thereto, Executive shall be treated as having continued in the employ of the Company and/or the Subsidiaries until the second anniversary of the occurrence of such Change of Control and to have retired on the last day of such period.

“Voluntary Termination” means any voluntary termination of Executive’s employment by Executive, other than a Termination For Good Reason, a Termination Due to Retirement, or a Termination Due to Disability by Executive.

“Welfare Benefits Continuation” means that until the second anniversary of the Date of Termination, Executive and, if applicable, his or her dependents, shall be entitled to continue participation in the life and health insurance benefit plans of

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the Company or its affiliates in which Executive and/or such dependents were participating as of the Date of Termination, and such other welfare benefit plans thereof in which the Company or its affiliates are required by law to permit the participation of Executive and/or such dependents, (collectively, the “Welfare Benefit Plans”). Such participation shall be on the same terms and conditions (including the requirement that Executive pay any premiums generally paid by an employee) as would apply if Executive were still in the employ of the Company and/or the Subsidiaries; provided that the continued participation of Executive and/or the dependents of Executive in such Welfare Benefit Plans shall cease on such earlier date as Executive may become eligible for comparable welfare benefits provided by a subsequent employer. To the extent that Welfare Benefits Continuation cannot be provided under the terms of the applicable plan, policy or program, the Company shall provide a comparable benefit under another plan or from the Company’s general assets.

(e) Out-Placement Services. If the Employment Period terminates because of a Termination Without Cause or a Termination For Good Reason, Executive shall be entitled to out-placement services, provided by the Company or its designee at the Company’s expense, for 12 months following the Date of Termination, or such lesser period as Executive may require such services.

(f) Certain Further Payments by Company.

(i) Tax Reimbursement Payment. In the event that any amount or benefit paid or distributed to Executive pursuant to this Agreement, taken together with any amounts or benefits otherwise paid or distributed to Executive by the Company or any affiliate (collectively, the “Covered Payments”), are or become subject to the tax (the “Excise Tax”) imposed under Section 4999 of the Code, or any similar tax that may hereafter be imposed, the Company shall pay to Executive at the time specified in this Section an additional amount (the “Tax Reimbursement Payment”) such that the net amount retained by the Executive with respect to such Covered Payments, after deduction of any Excise Tax on the Covered Payments and any Federal, state and local income tax and other tax on the Tax Reimbursement Payment provided for by this Section, but before deduction for any Federal, state or local income or employment tax withholding on such Covered Payments, shall be equal to the amount of the Covered Payments.

(ii) Applicable Rules. For purposes of determining whether any of the Covered Payments will be subject to the Excise Tax and the amount of such Excise Tax:

(A) Such Covered Payments shall be treated as “parachute payments” within the meaning of Section 280G of the Code, and all “parachute payments” in excess of the “base amount” (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the good faith judgment of the

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Company’s independent certified public accountants appointed prior to the Effective Date or tax counsel selected by such accountants (the “Accountants”), the Company has a reasonable basis to conclude that such Covered Payments (in whole or in part) either do not constitute “parachute payments” or represent reasonable compensation for personal services actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the “base amount,” or such “parachute payments” are otherwise not subject to such Excise Tax; and

(B) The value of any non-cash benefits or any deferred payment or benefit shall be determined by the Accountants in accordance with the principles of Section 280G of the Code.

(iii) Additional Rules. For purposes of determining the amount of the Tax Reimbursement Payment, the Executive shall be deemed to pay (A) Federal income taxes at the highest applicable marginal rate of Federal income taxation for the calendar year in which the Tax Reimbursement Payment is to be made, and (B) any applicable state and local income and other taxes at the highest applicable marginal rate of taxation for the calendar year in which the Tax Reimbursement Payment is to be made, net of the maximum reduction in Federal income taxes which could be obtained from the deduction of such state or local taxes if paid in such year.

(iv) Repayment or Additional Payment in Certain Circumstances.

(A) Repayment. In the event that the Excise Tax is subsequently determined by the Accountants or pursuant to any proceeding or negotiations with the Internal Revenue Service to be less than the amount taken into account hereunder in calculating the Tax Reimbursement Payment made, Executive shall repay to the Company, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior Tax Reimbursement Payment that would not have been paid if such lesser Excise Tax had been applied in initially calculating such Tax Reimbursement Payment. Notwithstanding the foregoing, in the event any portion of the Tax Reimbursement Payment to be repaid to the Company has been paid to any Federal, state or local tax authority, repayment thereof shall not be required until actual refund or credit of such portion has been made to Executive by the applicable tax authority. Executive and the Company shall mutually agree upon the course of action to be pursued (and the method of allocating the expenses thereof) if Executive’s good faith claim for refund or credit is denied.

(B) Additional Tax Reimbursement Payment. In the event that the Excise Tax is later determined by the Accountants or pursuant to any

16

proceeding or negotiations with the Internal Revenue Service to exceed the amount taken into account hereunder at the time the Tax Reimbursement Payment is made (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of the Tax Reimbursement Payment), the Company shall make an additional Tax Reimbursement Payment in respect of such excess (plus any interest or penalty payable with respect to such excess) at the time that the amount of such excess is finally determined.

(v) Timing for Tax Reimbursement Payment. The Tax Reimbursement Payment (or portion thereof) provided for in this Section 7 shall be paid to Executive not later than 10 business days following the payment of the Covered Payments; provided, however, that if the amount of such Tax Reimbursement Payment (or portion thereof) cannot be finally determined on or before the date on which payment is due, the Company shall pay to Executive by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than 45 calendar days after payment of the related Covered Payment. To the extent that the amount of the estimated Tax Reimbursement Payment exceeds the amount subsequently determined to have been due, Executive shall pay such excess to the Company on the fifth business day after written demand by the Company for payment.

8. Timing of Payments.

Accrued Salary, Severance Payments and Vested Benefits Enhancements shall be paid no later than 10 days following the Date of Termination. Pro-Rata Target Bonus shall be paid as follows: (a) if the Date of Termination occurs in the first, second or third calendar quarter of any particular calendar year, then the Pro-Rata Target Bonus shall be paid no later than 10 days following the Date of Termination, or (b) if the Date of Termination occurs in the fourth calendar quarter of any particular calendar year, then the Pro-Rata Target Bonus shall be paid no later than the same time as similar awards are paid to other executives participating in the plans or programs under which the awards are paid, but in no event later than March 31 of the calendar year following the end of such fourth calendar quarter. Vested Benefits and Equity Awards shall be paid no later than the time for payment Determined Under the Applicable Plan except as otherwise expressly superseded or modified by this Agreement. Tax Reimbursement Payments shall be paid at the time specified in Section 7 hereof.

9. Confidentiality and Other Covenants. By and in consideration of the compensation and benefits to be provided by the Company hereunder, including the severance

17

arrangements set forth herein, Executive agrees to the following:

(a) Confidentiality. Without the prior written consent of the Company, except to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency, Executive shall not disclose to any third person, or permit the use of for the benefit of any person or any entity other than the Company or its affiliates, any trade secrets, customer lists, information regarding product development, marketing plans, sales plans, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, financial records, or other financial, organizational, commercial, business, sales, marketing, technical, product or employee information relating to the Company or its affiliates or information designated as confidential, proprietary, and/or a trade secret, or any other information relating to the Company or its affiliates that Executive knows from the circumstances, in good faith and good conscience, should be treated as confidential, or any information that the Company or its affiliates may receive belonging to customers, agents or others who do business with the Company or its affiliates, except to the extent that any such information previously has been disclosed to the public by the Company or is in the public domain (other than by reason of Executive’s violation of this Section 9(a)).

(b) Company Property. Except as expressly provided herein, promptly following any termination of the Employment Period, Executive shall return to the Company all property of the Company, and all copies thereof in Executive’s possession or under his or her control.

(c) Injunctive Relief and Other Remedies with Respect to Covenants. Executive acknowledges and agrees that the covenants and obligations of Executive with respect to confidentiality and Company property relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, Executive agrees that the Company shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) restraining Executive from committing any violation of the covenants and obligations contained in this Section 9. These remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity. Notwithstanding the foregoing, in no event shall an asserted violation of the provisions of this Section constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement following a Change of Control.

10. Miscellaneous.

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(a) Survival. All of the provisions of Sections 7 (relating to termination of the Employment Period following a Change of Control or a Potential Change of Control), 9 (relating to confidentiality and Company property), 10(b) (relating to arbitration), 10(c) (relating to legal fees and expenses) and 10(n) (relating to governing law) of this Agreement shall survive the termination of this Agreement.

(b) Arbitration. Except as provided in Section 10, any dispute or controversy arising under or in connection with this Agreement (excluding employment related disputes that do not involve this Agreement) shall be resolved by binding arbitration. Such arbitration shall be held in the city of Hartford, Connecticut and except to the extent inconsistent with this Agreement, shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect at the time of the arbitration, and otherwise in accordance with the principles that would be applied by a court of law or equity. The arbitrator shall be acceptable to both the Company and Executive. If the parties cannot agree on an acceptable arbitrator, the dispute or controversy shall be heard by a panel of three arbitrators; one appointed by each of the parties and the third appointed by the other two arbitrators. The Company and Executive further agree that they will abide by and perform any award or awards rendered by the arbitrators and that a judgment may be entered on any award or awards rendered by any state or federal court having jurisdiction over the Company or Executive or any of their respective property.

(c) Legal Fees and Expenses. In any contest (whether initiated by Executive or by the Company) as to the validity, enforceability or interpretation of any provision of this Agreement, the Company shall pay Executive’s legal expenses (or cause such expenses to be paid) including, without limitation, Executive’s reasonable attorney’s fees, on a quarterly basis, upon presentation of proof of such expenses in a form acceptable to the Company, provided that Executive shall reimburse the Company for such amounts, plus simple interest thereon at the 90-day United States Treasury Bill rate as in effect from time to time, compounded annually, if Executive shall not prevail, in whole or in part, as to any material issue as to the validity, enforceability or interpretation of any provision of this Agreement.

(d) Successors; Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Company and its successors. The Company shall require any successor to all or substantially all of the business and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform the Agreement if no such succession had taken place. This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by Executive otherwise than by will or the law of descent and

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distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

(e) Assignment. Except as provided in Section 10(d), neither this Agreement nor any of the rights or obligations hereunder shall be assigned or delegated by any party hereto without the prior written consent of the other party.

(f) Entire Agreement. This Agreement together with the employment relationship between the parties constitutes the entire agreement between the parties hereto with respect to the matters referred to herein. This Agreement supersedes and replaces any prior or subsequent severance plan or arrangement that otherwise would apply to Executive following a Change of Control or a Potential Change of Control. No other agreement relating to the terms of Executive’s employment by the Company, oral or otherwise, shall be binding between the parties unless it is in writing and signed by the party against whom enforcement is sought. There are no promises, representations, inducements or statements between the parties other than those that are expressly contained herein. Executive acknowledges that he or she is entering into this Agreement of his or her own free will and accord, and with no duress, and that he or she has read this Agreement and that he or she understands it and its legal consequences.

(g) Severability; Reformation. In the event that one or more of the provisions of this Agreement shall become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. In the event of a determination that any of the provisions of Section 9(a) are not enforceable in accordance with their terms, Executive and the Company agree that such Section shall be reformed to make such Section enforceable in a manner that provides the Company the maximum rights permitted at law.

(h) Waiver. Waiver by any party hereto of any breach or default by the other party of any of the terms of this Agreement shall not operate as a waiver of any other breach or default, whether similar to or different from the breach or default waived. No waiver of any provision of this Agreement shall be implied from any course of dealing between the parties hereto or from any failure by either party hereto to assert its or his or her rights hereunder on any occasion or series of occasions.

(i) Notices. Any notice required or desired to be delivered under this Agreement shall be in writing and shall be delivered personally, by courier service, by registered mail, return receipt requested, or by telecopy and shall be effective upon actual receipt by the party to which such notice shall be directed, and shall be addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):

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If to the Company:	The Hartford Financial Services Group, Inc.
	Executive Row, Home Office
	Hartford Plaza
	690 Asylum Avenue
	Hartford, CT 06115
	Attention: General Counsel
with a copy to:	Debevoise & Plimpton
	875 Third Avenue
	New York, NY 10022
	Attn: Lawrence K. Cagney, Esq.
If to Executive:	The home address of Executive shown on the records of the Company

(j) Amendments. This Agreement may not be altered, modified or amended except by a written instrument signed by each of the parties hereto.

(k) Headings. Except as expressly provided herein, headings to provisions of this Agreement are for the convenience of the parties only and are not intended to be part of or to affect the meaning or interpretation hereof.

(l) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(m) Withholding. Any payments provided for herein shall be reduced by any amounts required to be withheld by the Company from time to time under applicable Federal, State or local income or employment tax laws or similar statutes or other provisions of law then in effect.

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(n) Governing Law. This Agreement shall be governed by the laws of the State of Connecticut, without reference to principles of conflicts or choice of law under which the law of any other jurisdiction would apply.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and Executive has hereunto set his or her hand, as of the day and year first above written.

	THE HARTFORD FINANCIAL SERVICES GROUP, INC.
WITNESSED:
	By:  Ann M. de Raismes Title: Group Senior Vice President,                Human Resources
	EXECUTIVE
WITNESSED:
	[Name]

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EX-10.08

Exhibit 10.08

The Hartford Senior Executive Severance Pay Plan

This document describes your benefits under The Hartford Senior Executive Severance Pay Plan, and includes the text of the Plan and other important information.

Rev. January 16, 2004

TABLE OF CONTENTS

TEXT OF THE HARTFORD SENIOR EXECUTIVE SEVERANCE PAY PLAN

		Page
1.	Purpose		3
2.	Application of Plan		3
3.	Covered Employees		3
4.	Severance Pay Upon Termination of Employment		4
5.	Schedule of Severance Pay		6
6.	Notice or Pay in Lieu of Notice		7
7.	Form of Payment of Severance Pay		7
8.	Employee Benefit Plan Coverage While Receiving Severance Pay		8
9.	Excluded Employee Compensation Plans, Programs, Arrangements and Perquisites		8
10.	Divestiture, Closure, Relocations		9
11.	Disqualifying Conduct		9
12.	Release		9
13.	Offset		9
14.	Administration of Plan		10
15.	Termination or Amendment		10
16.	Miscellaneous		11
OTHER IMPORTANT INFORMATION
1.	NOTICE		11

2

THE HARTFORD SENIOR EXECUTIVE
SEVERANCE PAY PLAN

1.	Purpose
	The purpose of The Hartford Senior Executive Severance Pay Plan (the “Plan”) is to assist in occupational transition by providing severance pay for senior executives covered by this Plan whose employment is terminated under conditions set forth in this Plan.
2.	Application of Plan
	This Plan is effective October 1, 1997. Any termination of employment of a Covered Employee that has an Effective Date (as defined herein) while this Plan is in effect shall be governed exclusively by the terms of this Plan and by no other plan, policy, practice or arrangement, except where this Plan is expressly superseded by a Key Executive Employment Protection Agreement with the Company, or an individual written employment contract or other written agreement with the Company. To the extent that this Plan is expressly superseded by any of the foregoing agreements or contracts, no severance shall be payable hereunder, and the provisions of this Plan will otherwise be deemed null and void and without effect.
3.	Covered Employees
	You are a Covered Employee under this Plan if you are an “Employee” (as defined below) who (1) qualifies as an “Eligible Employee” (as defined below), (2) is paid on a salaried basis, and (3) is identified as a Tier Two executive. A person who is on an authorized leave of absence, paid or unpaid (including medical leave of absence), of not more than twenty-six (26) weeks who would otherwise qualify as a Covered Employees, but for being on leave of absence, will be considered a Covered Employees for purposes of this Plan.
	For purposes of the Plan, “Employee” means any person regularly employed by Hartford Fire Insurance Company or any of its designated subsidiaries or affiliates (collectively, the “Company”), but shall not include any person who performs services for the Company as an independent contractor or under any other non-employee classification, or who is classified by the Company as, or determined by the Company to be, an independent contractor.

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	For purposes of the Plan, “Eligible Employee” means an Employee employed by the Company; provided, however, that except as the Board of Directors or the Committee may otherwise provide on a basis uniformly applicable to all persons similarly situated, Eligible Employee shall not include any “Ineligible Person,” which means all of the following: (1) A person who is paid on an hourly basis; or (2) A person who: (A) holds a position with the Company’s “HARTEMP” Program, or (B) is hired to work for the Company through a temporary employment agency, or (C) is hired to a position with the Company with notice on his or her date of hire that the position will terminate on a certain date; or (3) A person who is a leased employee (within the meaning of Code Section 414(n)(2)) of the Company or is otherwise employed through a temporary help firm, technical help firm, staffing firm, employee leasing firm, or professional employer organization, regardless of whether such person is an Employee of the Company, or (4) A person who performs services for the Company as an independent contractor or under any other non-employee classification, or who is classified by the Company as, or determined by the Company to be, an independent contractor, regardless of whether such person is characterized or ultimately determined by the Internal Revenue Service or any other Federal, State or local governmental authority or regulatory body to be an employee of the Company or its affiliates for income or wage tax purposes or for any other purpose.
	Notwithstanding any provision in the Plan to the contrary, if any person is an Ineligible Person or otherwise does not qualify as an Eligible Employee, or is otherwise ineligible to participate in the Plan, and such person is later required by a court or governmental authority or regulatory body to be classified as a person who is eligible to participate in the Plan, such person shall not be eligible to participate in the Plan, notwithstanding such classification, unless and until designated as an Eligible Employee by the Plan Administrator, and if so designated, the participation of such person in the Plan shall be prospective only.
4.	Severance Pay Upon Termination of Employment
	If the Company terminates your employment and you sign a Release acceptable to the Company, you shall be provided severance pay in accordance with the terms of this Plan except if you:

• are terminated for misconduct or other disciplinary action, which by way of example may include, but is not limited to, the following: serious violations of Company policies, violation of the Company Code of Corporate Conduct or other similar policy or undertaking of the Company; or any Company-initiated termination for cause or for actions that are immoral, unethical, inimical to the best interests of the Company, or illegal;

• refuse a Similar Position (as defined herein) offered as alternative employment with the Company. For purposes of this Plan, “Similar Position” shall mean a position of the same base salary rate and same opportunity for incentive with

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• similar duties, or having different duties which, in management’s judgment, the employee is able to perform and which is located within a 50-mile radius of the previous position’s location;

• terminate employment with the Company prior to the date selected by the Company as your last day of active employment (“Effective Date”);

• are terminated while on a leave of absence (paid or unpaid) after 26 weeks of such leave;

• are mandatorily retired on or after your Normal Retirement Date (as defined herein) where legally permitted, or are terminated with an Effective Date on or after your Normal Retirement Date. “Normal Retirement Date” shall mean the first of the month which coincides with or follows the employee’s 65th birthday;

• are terminated following acceptance or refusal of employment or continued employment with a purchaser in connection with any sale or divestiture described in Section 10 hereof;

• are eligible for greater severance payments under the terms of a Key Executive Employment Protection Agreement with the Company, or an individual written employment contract or other written agreement with the Company.

If you initiate termination of employment for any reason including resigning, retiring or failing to return to work immediately following the expiration of any leave of absence, no severance pay will be provided under this Plan.

No severance pay will be provided under this Plan upon any termination of employment as a result of your death, or as a result of your Disability as defined in The Hartford Investment and Savings Plan, as may be amended from time to time (the “Savings Plan”).

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5.	Schedule of Severance Pay
	Covered Employees will be provided severance pay in accordance with the following Schedule of Severance Pay which sets forth the months of Base Pay which are provided to a Covered Employee based upon the Covered Employee’s Years of Service as of the Effective Date.

Years of Service	Months of Base Pay
Less than 4 4 5 6 7 8 9 10 11 12 13 14 15 or more	12 13 14 15 16 17 18 19 20 21 22 23 24

The severance payment provided will be subject to applicable federal, state and local taxes, which will be withheld from such payment where required by applicable law as determined in the sole discretion of the Plan Administrator.

“Base Pay” shall mean your annual base salary at the Effective Date divided by twelve (12) months.

“Years of Service” shall mean the total number of completed years of employment measured from your Company service date to your Effective Date, rounded to the nearest whole year. Your Company service date is the date used to determine your eligibility for vesting under the applicable Company retirement plan in effect on the Effective Date.

Notwithstanding the above Schedule of Severance Pay, in no event (i) shall months of Base Pay provided to you exceed the number of months remaining between the Effective Date and your Normal Retirement Date, or (ii) shall severance pay exceed the equivalent of twice your total annual compensation during the year immediately preceding the Effective Date.

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6.	Notice or Pay in Lieu of Notice
	Except as provided in this Plan or under a Key Executive Employment Protection Agreement with the Company, or an individual written employment contract or other written agreement with the Company, you shall not be entitled to any notice of termination or pay in lieu thereof. At the sole discretion of the Plan Administrator or designee, notice may be provided.
7.	Form of Payment of Severance Pay
	Severance pay shall be paid in periodic payments according to the regular payroll schedule (“Periodic Payment”), provided that the Company reserves the right at any time to pay the remaining severance pay in a discounted lump sum.
	Any discounted lump sum paid under this Plan shall be equal to the present value of the remaining Periodic Payments of severance pay as determined by the Company using an interest rate equal to the prime rate at Citibank in effect on the date the Company notifies you that it is exercising its right to pay severance in the discounted lump sum.
	Periodic Payment of severance pay will commence or the discounted lump sum will be paid on the next day following the Effective Date, except that where the Company exercises its right to pay the discounted lump sum after the commencement of Periodic Payments, it will be paid promptly after the Company exercises such right.
	In the event of your death during the period you are receiving Periodic Payment of severance pay, the amount of severance pay remaining shall be paid, subject to applicable law, in a discounted lump sum payment to your spouse, if any, or to such other beneficiary or beneficiaries designated by you in writing, or if you are not married and failing such designation, to your estate.
	During the time period that you are receiving Periodic Payment of severance pay, or for which you receive severance pay by lump sum, you must continue to be available to render reasonable assistance to the Company, consistent with the level of your prior position with the Company, at times and locations that are mutually acceptable. In requesting such services, the Company will take into account any other commitments which you may have. After the Effective Date and normal wind up of your former duties, you will not be required to perform any regular services for the Company.
	In the event you secure employment other than with the Company while receiving severance pay, you must notify the Company. Upon such notification the Company generally will make a single discounted lump sum payment to you of all remaining severance pay. Periodic Payment of severance pay will cease if you are rehired by the Company.

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In the event you retire under the applicable Company retirement plan while receiving Periodic Payment, the Company will pay you any remaining severance pay in a single discounted lump sum payment.

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8.	Employee Benefit Plan Coverage While Receiving Severance Pay
	Except as otherwise provided herein, as long as you are receiving Periodic Payment, you will continue to be eligible for participation in Company employee benefit plans in effect as of the Effective Date, including without limitation, any non-qualified excess or supplemental benefit plans, in accordance with the applicable provisions of such plans. You will not be eligible to participate in any Company salary continuation, short-term or long-term disability plans, the Company business travel accident plan or any new employee benefit plan or any improvement to any existing employee benefit plan adopted by the Company after the Effective Date.
	If a lump sum payment of severance pay is made, eligibility to participate in all Company employee benefit plans ends.
	Deductions for continuing group life and medical/dental/health insurance and participation in the Savings Plan remain available while receiving Periodic Payment of the severance pay, subject to the maximum time periods as specified by the terms of the respective plans in effect as of the Effective Date.
9.	Excluded Employee Compensation Plans, Programs, Arrangements and Perquisites
	During the period you are receiving Periodic Payment of severance pay, you will not be eligible to accrue any paid time off or participate in any (i) bonus program; (ii) special termination programs; (iii) tax or financial advisory services; (iv) new awards under any long-term incentive compensation plan or program of the Company; (v) new or revised executive compensation programs that may be introduced after the Effective Date; or (vi) any other executive compensation program, plan, arrangement, practice, policy or perquisites unless specifically authorized by the Company in writing. The period during which you are receiving Periodic Payment of severance pay shall not be counted as service for purposes of any Company long-term incentive compensation awards outstanding as of the Effective Date. Notwithstanding the preceding sentence, during such period you will continue to be eligible to vest in any outstanding unvested deferred restricted stock units (bonus swap), as well as any outstanding unvested stock option awards except (a) any options awarded to you on December 17, 1997 or July 19, 2000, and (b) any other options that are designated under the terms of the award of such options as ineligible for continued crediting of service during Periodic Payment of severance pay. Also during such period, you will continue to be eligible to exercise any outstanding vested stock option awards, except to the extent that (I) such options first expire under the applicable plan or program, or (II) such options are designated under the terms of the award of such options as ineligible for continued exercise during Periodic Payment of severance pay. Any unvested restricted stock and unvested performance shares outstanding as of the Effective Date will be canceled as of the Effective Date, except to the extent otherwise provided in the applicable plan or program.

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10.	Divestiture. Closure, Relocations
	If the Company or a subsidiary or affiliate or division of the Company or a portion thereof, at which you are employed, is sold or divested, and if (i) you accept employment or continued employment with the purchaser, or (ii) refuse employment or continued employment with the purchaser on terms and conditions substantially comparable to those in effect immediately preceding the sale or divestiture, you shall not be provided severance pay hereunder or any related benefits described in Section 8 or Section 9 of this Plan. The provisions of this Section 10 apply to all sales and divestitures (whether accomplished as sales of assets, sales of corporate entities or any other method), other than any sale or divestiture that qualifies as a Change of Control under The Hartford 2000 Incentive Stock Plan (as may be amended from time to time).
11.	Disqualifying Conduct
	If, during the period you are receiving Periodic Payment of severance pay, you (i) conduct yourself in a manner which is inimical to the best interests of the Company, or which adversely affects those interests; (ii) make statements, either oral or written, which are false or misleading or which disparage the Company; (iii) fail to comply with any Company Covenant Against Disclosure and Assignment of Rights to Intellectual Property or other similar policy or undertaking of the Company; (iv) without the Company’s prior consent, induce any employees of the Company to leave their Company employment; or (v) fail to comply with applicable provisions of the Code of Conduct or other similar policy or undertaking of the Company, or any other applicable corporate policy of the Company, then the Company will have no further obligation to provide severance pay.
12.	Release
	No severance pay will be provided under this Plan unless you execute and deliver to the Company a Release, satisfactory to the Company, in which you discharge and release the Company, its affiliates and the Company’s directors, officers, employees and employee benefit plans from all claims (other than for benefits to which you are entitled under any Company employee benefit plan) arising out of your employment or termination of employment.
13.	Offset
	Any severance pay provided to you under this Plan shall be offset by reducing such amount by any severance pay, termination pay or similar pay or allowance which you receive or are entitled to receive (i) under any other Company plan, policy, practice, program or arrangement; (ii) pursuant to any Key Executive Employment Protection Agreement with the

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	Company, or any individual written employment agreement or other written agreement with the Company; or (iii) by virtue of any law, custom or practice excluding, however, any unemployment compensation which you may receive as a state unemployment award.
	Any severance pay provided to you under this Plan shall also be offset by reducing such severance pay by any severance pay, termination pay or similar pay or allowance you received as a result of any prior termination of employment with the Company.
	Any severance pay and any notice pay provided to you under this Plan shall be offset by reducing such severance pay and notice pay by any payments made to you by the Company pursuant to the Worker Adjustment and Retraining Notification Act (“WARN”) and any similar federal, state or local law.
	Any severance pay provided to you under this Plan shall be offset by reducing such severance pay by any payment made to you under any Company or statutory disability plan, policy, practice, program or arrangement where any such payment is made for any period of time after the Effective Date.
14.	Administration of Plan
	Responsibility for administration of this Plan rests with Hartford Fire Insurance Company’s Group Senior Vice President, Human Resources (or other individual with similar responsibilities) or his designee (“Plan Administrator”).
	The Plan Administrator shall have the exclusive right to interpret this Plan, adopt any rules and regulations for carrying out this Plan as may be appropriate and decide any and all matters arising under this Plan, including, but not limited to, the right to determine appeals. Subject to applicable federal and state law, all interpretations and decisions by the Plan Administrator shall be final, conclusive and binding on all parties affected thereby.
15.	Termination or Amendment
	The Plan Administrator shall have the power to make amendments to the Plan that do not involve a material cost to the Company or are required by applicable law. Any other amendments to the Plan shall be made by the Board of Directors of Hartford Fire Insurance Company. The Company, through its Board of Directors, reserves the right, in its sole discretion, to terminate, suspend, amend or modify this Plan (“Plan Change”) in whole or in part at any time without prior notice except that no such Plan Change, and no Plan amendment made by the Plan Administrator, may reduce or adversely affect severance pay for any employee whose employment terminates within two years of the effective date of such Plan Change or amendment, provided that such Executive was a Covered Employee under this Plan on the date of such Plan Change or amendment. Notwithstanding anything in this Plan to the contrary, the Plan shall not be amended, modified, suspended or terminated during the period in which a Change of Control (as defined in The Hartford Incentive Stock Plan, as may be amended from time to time) is threatened. For purposes of the preceding sentence, a Change of Control shall be deemed to be threatened for the period beginning on

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the date of any Potential Change of Control (as defined in The Hartford Incentive Stock Plan,

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	as may be amended from time to time), and ending upon the earlier of: (i) the second anniversary of the date of such Potential Change of Control, (ii) the date a Change of Control occurs, or (iii) the date the Board of Directors of The Hartford Financial Services Group, Inc. or the appropriate committee thereof determines in good faith that a Change of Control is no longer threatened.
16.	Miscellaneous

• In cases where severance pay is provided under this Plan, pay in lieu of any unused paid time off entitlement will be paid to you in a single lump sum payment after severance pay ceases. Such lump sum payment will not have the effect of extending your Company service for any purpose.

• Benefits under this Plan are paid for entirely by the Company from its general assets.

• The section headings contained in this Plan are included solely for convenience of reference and shall not in any way affect the meaning of any provision of this Plan.

OTHER IMPORTANT INFORMATION

NOTICE

This Plan is not a contract of employment. It does not guarantee your employment for any specified period and does not limit the right of the Company to terminate your employment at any time for any reason. Employment with the Company is terminable at will.

Any employee who is not obligated to continue his/her employment under a formal written employment agreement with the Company retains the right to terminate their employment at any time, with or without notice, and with or without cause. Likewise, the Company can terminate the employment of any employee at any time, with or without notice, and with or without cause, subject to applicable law.

No supervisor or manager has any authority to enter into an employment agreement, written or verbal, or to make any agreement or representations contrary to the preceding paragraph, unless it is authorized by the Chairman of The Hartford Financial Services Group, Inc. and such agreement is in writing. Further no document, communication or publication of The Hartford Financial Services Group, Inc., the Company, or any affiliate of either of the foregoing should be understood as, or construed as, making such an agreement or extending such a representation.

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EX-10.09

Exhibit 10.09

The Hartford Financial Services Group, Inc.

17,211,837 Shares of Common Stock, par value $.01 per share

THE HARTFORD INCENTIVE STOCK PLAN

PLAN INFORMATION

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.

The Prospectus covers such additional securities as may be issuable as a result of anti-dilution provisions contained in the instruments pursuant to which securities covered by the Prospectus are issued.

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.

Amended and Restated as of October 16, 2003

     Additional information about The Hartford Incentive Stock Plan (the “Plan”) and its administration may be obtained without charge by written or oral request to the Manager of Stock Option Plan Administration, The Hartford Financial Services Group, Inc. (“the Company”), Hartford Plaza, Hartford, CT 06115, telephone number (860) 547-5000.

AVAILABLE INFORMATION

     The Company will provide, without charge, upon the written or oral request of any person to whom this Prospectus is delivered, a copy of any of the following documents, all of which are incorporated by reference in this Prospectus:

(a)	The Company’s latest Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “Commission”) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”);
(b)	All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the Form 10-K referred to in (a) above; and
(c)	The description of the Company’s common stock and the rights associated with the Company’s common stock contained in a registration statement filed under the Exchange Act, including any amendment or report filed for the purpose of updating such description.

     All documents subsequently filed with the Commission by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date hereof 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 shall be deemed to be incorporated by reference in the Prospectus and to be a part thereof from the date of filing such documents.

     In addition, the Company will provide, without charge, upon the written or oral request of any person to whom this Prospectus is delivered, the following documents:

(a)	When updating information is furnished, a copy of all documents previously delivered containing Plan information that then constitute part of this Prospectus; and
(b)	A copy of whichever of the following was previously distributed pursuant to Rule 428(b)(2) under the Securities Act of 1933, as amended (the “Securities Act”):

(i)	The Company’s annual report to stockholders containing the information required by Rule 14a-3(b) under the Exchange Act for its latest fiscal year;
(ii)	The Company’s annual report on Form 10-K for its latest fiscal year; or

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(iii) The latest prospectus filed pursuant to Rule 424(b) under the Securities Act that contains audited financial statements for the Company’s latest fiscal year.

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 Company’s most recent annual report to shareholders and any other report or communication distributed to the Company’s shareholders generally, may be obtained without charge by written or oral request to the Manager of Stock Option Plan Administration, The Hartford Financial Services Group, Inc., Hartford Plaza, Hartford, CT 06115, telephone number: (860) 547-5000.

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TABLE OF CONTENTS

General Information	4
The Hartford Incentive Stock Plan	5
Administration	23
Federal Tax Treatment	23

GENERAL INFORMATION

     The Plan contains a limit on the aggregate number of shares which may be awarded for the duration of the Plan. The maximum limit applicable to all share awards for the duration of the Plan is eight percent (8%) of the total outstanding shares of the Company’s common stock as of the date of shareholder approval of the Plan. In addition, no more than 20% of the total may be available for awards of restricted stock or performance shares under the Plan. The Plan limits the award of stock options to any one person in any year to no more than 1,000,000 shares. The Plan limits the award of performance shares to any one person in any year to no more than 200,000 shares.

     The Plan permits the committee administering the Plan to award performance shares and restricted stock, as well as non-qualified stock options and incentive stock options, with or without stock appreciation rights. Reference is made to the text of the Plan herein for a complete description of awards permitted under the Plan and the relevant provisions and conditions applicable thereto.

     The prospectus does not cover resales of the Company’s common stock acquired pursuant to the provisions of the Plan. Resales may be subject to restrictions or limitations imposed by the Securities Act of 1933 and the Securities Exchange Act of 1934.

     The Plan is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974. Furthermore, Section 401 of the Internal Revenue Code relating to certain qualified pension, profit-sharing and stock bonus plans does not apply to the Plan.

     Plan participants receive information with respect to their participation, including the date of grant, the exercise price, the amount exercisable and the expiration date, as well as applicable information concerning whatever performance shares or restricted stock may be relevant to them.

     Set forth below is the text of the Plan.

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THE HARTFORD INCENTIVE STOCK PLAN

1. Purpose

     The purpose of the Plan is to motivate and reward superior performance on the part of Key Employees of The Hartford and to thereby attract and retain Key Employees of superior ability. In addition, the Plan is intended to further opportunities for stock ownership by such Key Employees and Directors in order to increase their proprietary interest in The Hartford and, as a result, their interest in the success of the Company. Awards will be made, in the discretion of the Committee, to Key Employees (including officers and directors who are also Key Employees) whose responsibilities and decisions directly affect the performance of any Participating Company and its subsidiaries, and also to Directors. Such incentive awards may consist of stock options and stock appreciation rights payable in stock or cash for Key Employees or Directors, and performance shares, restricted stock or any combination of the foregoing for Key Employees, as the Committee may determine.

2. Definitions

     When used herein, the following terms shall have the following meanings:

     “Act” means the Securities Exchange Act of 1934, as amended.

     “Award” means an award granted to any Key Employee or Director in accordance with the provisions of the Plan in the form of Options, Rights, Performance Shares or Restricted Stock, or any combination of the foregoing, as applicable.

     “Award Document” means the written notice, agreement, or other document evidencing each Award granted under the Plan.

     “Beneficial Owner” means any Person who, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” (within the meaning of Rule 13d-3 under the Act) of any securities of a company, including any such right pursuant to any agreement, arrangement or understanding (whether or not in writing), provided that: (a) a Person shall not be deemed the Beneficial Owner of any security as a result of an agreement, arrangement or understanding to vote such security (i) arising solely from a revocable proxy or consent given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the Act and the applicable rules and regulations thereunder, or (ii) made in connection with, or to otherwise participate in, a proxy or consent solicitation made, or to be made, pursuant to, and in accordance with, the applicable provisions of the Act and the applicable rules and regulations thereunder, in either case described in clause (i) or (ii) above, whether or not such agreement, arrangement or understanding is also then reportable by such Person on Schedule 13D under the Act (or any comparable or successor report); and (b) a Person engaged in business as an underwriter of securities shall not be deemed to be the

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Beneficial Owner of any security acquired through such Person’s participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition.

     “Beneficiary” means the beneficiary or beneficiaries designated pursuant to the Plan to receive the amount, if any, payable under the Plan upon the death of an Award recipient.

     “Board” means the Board of Directors of the Company.

     “Change of Control” means the occurrence of an event defined in Section 9 of the Plan.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Committee” means the Compensation and Personnel Committee of the Board or such other committee as may be designated by the Board to administer the Plan.

     “Company” means The Hartford Financial Services Group, Inc. and its successors and assigns.

     “Director” means a member of the Board who is not an employee of any Participating Company.

     “Eligible Employee” means an Employee as defined in the Plan; provided, however, that except as the Board or the Committee, pursuant to authority delegated by the Board, may otherwise provide on a basis uniformly applicable to all persons similarly situated, “Eligible Employee” shall not include any “Ineligible Person,” which includes: (a) a person who (i) holds a position with the Company’s “HARTEMP” Program, (ii) is hired to work for a Participating Company through a temporary employment agency, or (iii) is hired to a position with a Participating Company with notice on his or her date of hire that the position will terminate on a certain date; (b) a person who is a leased employee (within the meaning of Code Section 414(n)(2)) of a Participating Company or is otherwise employed by or through a temporary help firm, technical help firm, staffing firm, employee leasing firm, or professional employer organization, regardless of whether such person is an Employee of a Participating Company, and (c) a person who performs services for a Participating Company as an independent contractor or under any other non-employee classification, or who is classified by a Participating Company as, or determined by a Participating Company to be, an independent contractor, regardless of whether such person is characterized or ultimately determined by the Internal Revenue Service or any other Federal, State or local governmental authority or regulatory body to be an employee of a Participating Company or its affiliates for income or wage tax purposes or for any other purpose.

     Notwithstanding any provision in the Plan to the contrary, if any person is an Ineligible Person, or otherwise does not qualify as an Eligible Employee, or otherwise is ineligible to participate in the Plan, and such person is later required by a court or governmental authority or regulatory body to be classified as a person who is eligible to

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participate in the Plan, such person shall not be eligible to participate in the Plan, notwithstanding such classification, unless and until designated as an Eligible Employee by the Committee, and if so designated, the participation of such person in the Plan shall be prospective only.

     “Employee” means any person regularly employed by a Participating Company, but shall not include any person who performs services for a Participating Company as an independent contractor or under any other non-employee classification, or who is classified by a Participating Company as, or determined by a Participating Company to be, an independent contractor.

     “Fair Market Value,” unless otherwise indicated in the provisions of this Plan, means, as of any date, the composite closing price for one share of Stock on the New York Stock Exchange or, if no sales of Stock have taken place on such date, the composite closing price on the most recent date on which selling prices were quoted, the determination to be made in the discretion of the Committee.

     “Formula Price” means the highest of: (a) the highest composite daily closing price of the Stock during the period beginning on the 60^th calendar day prior to the Change of Control and ending on the date of such Change of Control, (b) the highest gross price paid for the Stock during the same period of time, as reported in a report on Schedule 13D filed with the Securities and Exchange Commission, or (c) the highest gross price paid or to be paid for a share of Stock (whether by way of exchange, conversion, distribution upon merger, liquidation or otherwise) in any of the transactions set forth in Section 9 of the Plan as constituting a Change of Control; provided that in the case of the exercise of any such Right related to an Incentive Stock Option, “Formula Price” shall mean the Fair Market Value of the Stock at the time of such exercise.

     “Incentive Stock Option” means a stock option qualified under Section 422 of the Code.

     “Key Employee” means an Eligible Employee (including any officer or director who is also an Eligible Employee) whose responsibilities and decisions, in the judgment of the Committee, directly affect the performance of the Company and its subsidiaries.

     “Option” means an option awarded under Section 5 of the Plan to purchase Stock of the Company, which option may be an Incentive Stock Option or a non-qualified stock option.

     “Participating Company” means the Company or any subsidiary or other affiliate of the Company; provided, however, for Incentive Stock Options only, “Participating Company” means the Company or any corporation which at the time such Option is granted qualifies as a “subsidiary” of the Company under Section 424(f) of the Code.

     “Performance Share” means a performance share awarded under Section 6 of the Plan.

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     “Person” has the meaning ascribed to such term in Section 3(a)(9) of the Act, as supplemented by Section 13(d)(3) of the Act; provided, however, that Person shall not include: (a) the Company, any subsidiary of the Company or any other Person controlled by the Company, (b) any trustee or other fiduciary holding securities under any employee benefit plan of the Company or of any subsidiary of the Company, or (c) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of securities of the Company.

     “Plan” means The Hartford Incentive Stock Plan, as the same may be amended, administered or interpreted from time to time.

     “Plan Year” means the calendar year.

     “Potential Change of Control” means the occurrence of an event defined in Section 9 of the Plan.

     “Retirement” means the following:

     (a) Key Employees Hired Before 2001. Solely with respect to a Key Employee with an original hire date with a Participating Company before January 1, 2001 who: (i) is covered in whole or in part under the final average pay formula of the Retirement Plan, or (ii) is not eligible for coverage under the Retirement Plan, “Retirement” means satisfaction of the requirements for early or normal retirement under the final average pay formula of the Retirement Plan (assuming such Key Employee were covered under the final average pay formula of the Retirement Plan), provided such event results in such Key Employee’s separation from employment with the Company, or

     (b) Key Employees Hired During 2001. Solely with respect to a Key Employee with an original hire date with a Participating Company on or after January 1, 2001 but before January 1, 2002 who: (i) is covered under the cash balance formula of the Retirement Plan, or (ii) is not eligible for coverage under the Retirement Plan, “Retirement” means satisfaction of the requirements for early or normal retirement under the final average pay formula of the Retirement Plan (assuming such Key Employee were covered under the final average pay formula of the Retirement Plan), provided such event results in such Member’s separation from the employment of the Company.

     “Retirement Plan” means The Hartford Retirement Plan for U.S. Employees, as amended from time to time.

     “Restricted Stock” means Stock awarded under Section 7 of the Plan subject to such restrictions as the Committee deems appropriate or desirable.

     "Right” means a stock appreciation right awarded in connection with an Option under Section 5 of the Plan.

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     “Stock” means the common stock ($.01 par value) of The Hartford.

     “The Hartford” means the Company and its subsidiaries, and their successors and assigns.

     “Total Disability” means the complete and permanent inability of a Key Employee to perform all of his or her duties under the terms of his or her employment with any Participating Company, as determined by the Committee upon the basis of such evidence, including independent medical reports and data, as the Committee deems appropriate or necessary.

     “Transferee” means any person or entity to whom or to which a non-qualified stock option has been transferred and assigned in accordance with Section 5(h) of the Plan.

3. Shares Subject to the Plan

     The aggregate number of shares of Stock which may be awarded under the Plan shall be subject to a maximum limit applicable to all Awards for the duration of the Plan (the “Maximum Limit”). The Maximum Limit shall be eight percent (8%) of the total of the outstanding shares of Stock as of the date of shareholder approval of the Plan.

     In addition to the foregoing, in no event shall more than twenty percent (20%) of the total number of shares on a cumulative basis be available for Restricted Stock and Performance Share Awards. Further, for any Plan Year: (a) no individual Key Employee may receive an Award of Options for more than 1,000,000 shares, and (b) no individual Key Employee may receive an Award of Performance Shares for more than 200,000 shares.

     Subject to the above limitations, shares of Stock to be issued under the Plan may be made available from the authorized but unissued shares, or shares held by the Company in treasury or from shares purchased in the open market.

     For the purpose of computing the total number of shares of Stock available for Awards under the Plan, there shall be counted against the foregoing limitations the number of shares of Stock subject to issuance upon exercise or settlement of Awards and the number of shares of Stock which equals the value of performance share Awards, in each case determined as at the dates on which such Awards are granted. If any Awards under the Plan are forfeited, terminated, expire unexercised, are settled in cash in lieu of Stock or are exchanged for other Awards, the shares of Stock which were theretofore subject to such Awards shall again be available for Awards under the Plan to the extent of such forfeiture, termination, expiration, cash settlement or exchange of such Awards. Further, any shares of Stock that are exchanged (either actually or constructively) by optionees as full or partial payment to the Company of the purchase price of shares of Stock being acquired through the exercise of an Option granted under the Plan may be available for subsequent Awards.

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4. Grant of Awards and Award Documents

     (a) Subject to the provisions of the Plan, the Committee shall: (i) determine and designate from time to time those Key Employees or groups of Key Employees to whom Awards are to be granted, and those Directors to whom Options and Rights may be granted; (ii) determine the form or forms of Award to be granted to any Key Employee and any Director; (iii) determine the amount or number of shares of Stock subject to each Award; and (iv) determine the terms and conditions of each Award.

     (b) Each Award granted under the Plan shall be evidenced by a written Award Document. Such Award Document shall be subject to and incorporate the express terms and conditions of each Award, if any, required under the Plan or required by the Committee.

5. Stock Options and Rights

     (a) With respect to Options and Rights, the Committee shall: (i) authorize the granting of Incentive Stock Options, non-qualified stock options, or a combination of Incentive Stock Options and non-qualified stock options; (ii) authorize the granting of Rights which may be granted in connection with all or part of any Option granted under this Plan, either concurrently with the grant of the Option or at any time thereafter during the term of the Option; (iii) determine the number of shares of Stock subject to each Option or the number of shares of Stock that shall be used to determine the value of a Right; and (iv) determine the time or times when and the manner in which each Option or Right shall be exercisable and the duration of the exercise period.

     (b) Any option issued hereunder which is intended to qualify as an Incentive Stock Option shall be subject to such limitations or requirements as may be necessary for the purposes of Section 422 of the Code or any regulations and rulings thereunder to the extent and in such form as determined by the Committee in its discretion.

     (c) The exercise period for a non-qualified stock option and any related Right shall not exceed ten years and two days from the date of grant, and the exercise period for an Incentive Stock Option and any related Right shall not exceed ten years from the date of grant.

     (d) The Option price per share shall be determined by the Committee at the time any Option is granted and shall be not less than the Fair Market Value of one share of Stock on the date the Option is granted.

     (e) No part of any Option or Right may be exercised until the Key Employee who has been granted the Award shall have remained in the employ of a Participating Company for such period after the date of grant as the Committee may specify, if any, and the Committee may further require exercisability in installments.

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     (f) Except as provided in Section 9, the purchase price of the shares of Stock as to which an Option is exercised shall be paid to the Company at the time of exercise either in cash, Stock already owned by the optionee, or a combination of the foregoing having a total Fair Market Value equal to the purchase price. The Committee shall determine acceptable methods for tendering Stock as payment upon exercise of an Option and may impose such limitations and prohibitions on the use of Stock for such purpose as it deems appropriate.

     (g) In case of a Key Employee’s termination of employment with all Participating Companies, the following provisions shall apply:

          (i) If a Key Employee who has been granted an Option shall die before such Option has expired, his or her Option may be exercised in full by: (A) the person or persons to whom the Key Employee’s rights under the Option pass by will, or if no such person has such right, by his or her executors or administrators; (B) his or her Transferee(s) (with respect to non-qualified Options); or (C) his or her Beneficiary designated pursuant to the Plan, at any time, or from time to time, within five years after the date of the Key Employee’s death or within such other period, and subject to such terms and conditions as the Committee may specify, but not later than the expiration date specified in Section 5(c) above. Any such Options not fully exercisable immediately prior to such optionee’s death shall become fully exercisable upon such death unless the Committee, in its sole discretion, shall otherwise determine.

          (ii) If the Key Employee’s employment with all Participating Companies terminates: (A) because of his or her Total Disability, or (B) solely in the case of a Key Employee with an original hire date with a Participating Company before January 1, 2002, because of his or her voluntary termination of employment due to Retirement; he or she may exercise his or her Options in full at any time, or from time to time, within five years after the date of the termination of his or her employment, or within such other period, and subject to such terms and conditions as the Committee may specify, but not later than the expiration date specified in Section 5(c) above. Any such Options not fully exercisable immediately prior to such optionee’s Total Disability or Retirement shall become fully exercisable upon such Total Disability or Retirement unless the Committee, in its sole discretion, shall otherwise determine.

          (iii) Except as provided in Section 5(g)(ii) and Section 9, if the Key Employee shall voluntarily resign from employment or he or she is terminated for cause as determined by the Committee, the Options or Rights shall be canceled coincident with the effective date of the termination of employment.

          (iv) Except as provided in Section 9, if a Key Employee’s employment terminates for any other reason, he or she may exercise his or her Options, to the extent that he or she shall have been entitled to do so at the date of the termination of his or her employment at any time, or from time to time, within three months after the date of the

termination of his or her employment, or within such other period, and subject to such terms

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and conditions as the Committee may specify, but not later than the expiration date specified in Section 5(c) above.

     (h) Except as provided in this Section 5(h) or required by applicable law, no Option or Right granted under the Plan shall be transferable other than by will or by the laws of descent and distribution. During the lifetime of the optionee, an Option or Right shall be exercisable only by the Key Employee or Director to whom the Option or Right is granted. Notwithstanding the foregoing, all or a portion of a non-qualified Option may be transferred and assigned by such persons designated by the Committee, to such persons or groups of persons designated as permissible Transferees by the Committee, and upon such terms and conditions as the Committee may from time to time authorize and determine in its sole discretion.

     (i) Except as provided in Section 9, if a Director’s service on the Board terminates for any reason, including without limitation, termination due to death, disability or retirement, such Director (or Beneficiary, in the event of death) may exercise any Option or Right granted to him or her only to the extent determined by the Committee as set forth in such Director’s Award Document and/or any administrative rules or other terms and conditions adopted by the Committee from time to time applicable to such Option or Right granted to such Director.

     (j) With respect to an Incentive Stock Option, the Committee shall specify such terms and provisions as the Committee may determine to be necessary or desirable in order to qualify such Option as an “incentive stock option” within the meaning of Section 422 of the Code.

     (k) With respect to the exercisability and settlement of Rights:

          (i) Upon exercise of a Right, a Key Employee or Director shall be entitled, subject to such terms and conditions the Committee may specify, to receive upon exercise thereof all or a portion of the excess of (A) the Fair Market Value of a specified number of shares of Stock at the time of exercise, as determined by the Committee, over (B) a specified amount which shall not, subject to Section 5(d), be less than the Fair Market Value of such specified number of shares of Stock at the time the Right is granted. Upon exercise of a Right, payment of such excess shall be made as the Committee shall specify in cash, the issuance or transfer to the Key Employee or Director of whole shares of Stock with a Fair Market Value at such time equal to any excess, or a combination of cash and shares of Stock with a combined Fair Market Value at such time equal to any such excess, all as determined by the Committee. The Company will not issue a fractional share of Stock and, if a fractional share would otherwise be issuable, the Company shall pay cash equal to the Fair Market Value of the fractional share of Stock at such time.

          (ii) In the event of the exercise of such Right, the Company’s obligation in respect of any related Option or such portion thereof will be discharged by payment of the Right so exercised.

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6. Performance Shares

     (a) Subject to the provisions of the Plan, the Committee shall: (i) determine and designate from time to time those Key Employees or groups of Key Employees to whom Awards of Performance Shares are to be made, (ii) determine the performance period (the “Performance Period”) and performance objectives (the “Performance Objectives”) applicable to such Awards, (iii) determine whether to impose a restriction period (the “Restriction Period”) following the completion of the Performance Period applicable to any Key Employees or groups of Key Employees, (iv) determine the form of settlement of a Performance Share, and (v) generally determine the terms and conditions of each such Award. At any date, each Performance Share shall have a value equal to the Fair Market Value of a share of Stock at such date; provided that the Committee may limit the aggregate amount payable upon the settlement of any Award. The maximum award for any individual employee in any given year shall be 200,000 Performance Shares.

     (b) The Committee shall determine a Performance Period of not less than one nor more than five years. Performance Periods may overlap and Key Employees may participate simultaneously with respect to Performance Shares for which different Performance Periods are prescribed.

     (c) The Committee may impose a Restriction Period of any duration determined appropriate in its sole discretion, which shall apply immediately following the completion of the Performance Period to which it relates.

     (d) The Committee shall determine the Performance Objectives of Awards of Performance Shares. Performance Objectives may vary from Key Employee to Key Employee and between groups of Key Employees and shall be based upon one or more of the following objective criteria, as the Committee deems appropriate, which may be (i) determined solely by reference to the performance of the Company, any subsidiary or affiliate of the Company or any division or unit of any of the foregoing, or (ii) based on comparative performance of any one or more of the following relative to other entities: (A) earnings per share, (B) return on equity, (C) cash flow, (D) return on total capital, (E) return on assets, (F) economic value added, (G) increase in surplus, (H) reductions in operating expenses, (I) increases in operating margins, (J) earnings before income taxes and depreciation, (K) total shareholder return, (L) return on invested capital, (M) cost reductions and savings, (N) earnings before interest, taxes, depreciation and amortization (“EBITDA”), (O) pre-tax operating income, (P) productivity improvements, or (iii) a Key Employee’s attainment of personal objectives with respect to any of the foregoing criteria or other criteria such as growth and profitability, customer satisfaction, leadership effectiveness, business development, negotiating transactions and sales or developing long term business goals. If during the course of a Performance Period there shall occur significant events which the Committee expects to have a substantial effect on the applicable Performance Objectives during such period, the Committee may revise such Performance Objectives.

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     (e) At the beginning of a Performance Period, the Committee shall determine for each Key Employee or group of Key Employees the number of Performance Shares or the percentage of Performance Shares which shall be paid to the Key Employee or member of the group of Key Employees following completion of the Performance Period or if later, following any applicable Restriction Period, if the applicable Performance Objectives are met in whole or in part.

     (f) If a Key Employee terminates service with all Participating Companies during a Performance Period or any applicable Restriction Period: (i) because of death, (ii) because of Total Disability, (iii) solely in the case of a Key Employee with an original hire date with a Participating Company before January 1, 2002, because of his or her voluntary termination of employment due to Retirement, or (iv) under other circumstances where the Committee in its sole discretion finds that a waiver would be in the best interests of the Company; that Key Employee may, as determined by the Committee, be entitled to payment in settlement of such Performance Shares at the end of the Performance Period or if later, at the end of any applicable Restriction Period, based upon the extent to which the Performance Objectives were satisfied at the end of such Performance Period and prorated for the portion of the Performance Period together with any applicable Restriction Period during which the Key Employee was actively employed by any Participating Company; provided, however, the Committee may provide for an earlier payment in settlement of such Performance Shares in such amount and under such terms and conditions as the Committee deems appropriate or desirable. If a Key Employee terminates service with all Participating Companies during a Performance Period or any applicable Restriction Period for any other reason, then such Key Employee shall not be entitled to any Award with respect to that Performance Period and/or Restriction Period unless the Committee shall otherwise determine.

     (g) Each Award of a Performance Share shall be paid in whole shares of Stock, or cash, or a combination of Stock and cash either as a lump sum payment or in annual installments, all as the Committee shall determine, with payment to commence as soon as practicable after the end of the relevant Performance Period or if later, at the end of any applicable Restriction Period.

     (h) Except as otherwise required by applicable law, no Performance Share granted under the Plan shall be transferable other than by will or by the laws of descent or distribution.

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7. Restricted Stock

     (a) Except as provided in Section 9, Restricted Stock shall be subject to a restriction period (after which restrictions will lapse) which shall mean a period commencing on the date the Award is granted and ending on such date as the Committee shall determine (the “Restriction Period”). The Committee may provide for the lapse of restrictions in installments where deemed appropriate and it may also require the achievement of predetermined performance objectives in order for such shares to vest. Except as otherwise provided in the Plan, certificates for shares of Restricted Stock shall be delivered to a Key Employee as soon as administratively practicable following the end of the applicable Restriction Period.

     (b) Except when the Committee determines otherwise pursuant to Section 7(d), if a Key Employee terminates employment with all Participating Companies for any reason before the expiration of the Restriction Period, all shares of Restricted Stock still subject to restriction shall be forfeited by the Key Employee and shall be reacquired by the Company.

     (c) Except as otherwise provided in this Section 7 or required by applicable law, no shares of Restricted Stock received by a Key Employee shall be sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of during the Restriction Period.

     (d) In cases of: (i) death, (ii) Total Disability, (iii) solely in the case of a Key Employee with an original hire date with a Participating Company before January 1, 2002, a voluntary termination of employment due to Retirement, or (iv) in cases of special circumstances, the Committee may, in its sole discretion when it finds that a waiver would be in the best interests of the Company, elect to waive any or all remaining restrictions with respect to such Key Employee’s Restricted Stock.

     (e) The Committee may require, under such terms and conditions as it deems appropriate or desirable, that the certificates for Stock delivered under the Plan may be held in custody by a bank or other institution, or that the Company may itself hold such shares in custody until the Restriction Period expires or until restrictions thereon otherwise lapse, or later as provided in Section 14 hereof. The Committee may require, as a condition of any Award of Restricted Stock that the Key Employee shall have delivered a stock power endorsed in blank relating to the Restricted Stock, and shall require, as a condition of settlement of any Award of Stock, that the Key Employee satisfy applicable tax withholding obligations as provided in Section 14 hereof.

     (f) Nothing in this Section 7 shall preclude a Key Employee from exchanging any shares of Restricted Stock subject to the restrictions contained herein for any other shares of Stock that are similarly restricted.

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     (g) Subject to Section 7(e) and Section 8, each Key Employee entitled to receive Restricted Stock under the Plan shall be issued a certificate for the shares of Stock. Such certificate shall be registered in the name of the Key Employee, and shall bear an appropriate legend reciting the terms, conditions and restrictions, if any, applicable to such Award and shall be subject to appropriate stop-transfer orders.

8. Certificates for Awards of Stock

     (a) The Company shall not be required to issue or deliver any certificates for shares of Stock prior to: (i) the listing of such shares on any stock exchange on which the Stock may then be listed, (ii) the completion of any registration or qualification of such shares under any federal or state law, or any ruling or regulation of any government body which the Company shall, in its sole discretion, determine to be necessary or advisable, and (iii) the satisfaction of any tax withholding obligations as provided in Section 14 hereof.

     (b) All certificates for shares of Stock delivered under the Plan shall also be subject to such stop-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Stock is then listed and any applicable federal or state securities laws, and the Committee may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions. In making such determination, the Committee may rely upon an opinion of counsel for the Company.

     (c) Except for the restrictions on Restricted Stock under Section 7, each Key Employee who receives Stock in settlement of an Award of Stock, shall have all of the rights of a shareholder with respect to such shares, including the right to vote the shares and receive dividends and other distributions. No Key Employee awarded an Option, a Right or a Performance Share, and no Director awarded an Option or Right, shall have any right as a shareholder with respect to any shares of Stock covered by his or her Option, Right or Performance Share prior to the date of issuance to him or her of a certificate or certificates for such shares.

9. Change of Control

     (a) For purposes of this Plan, a Change of Control shall occur if:

          (i) a report on Schedule 13D shall be filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Act disclosing that any Person, other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company is the Beneficial Owner of twenty percent or more of the outstanding stock of the Company entitled to vote in the election of directors of the Company;

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          (ii) any Person other than the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares pursuant to a tender offer or exchange offer to acquire any stock of the Company (or securities convertible into stock) for cash, securities or any other consideration, provided that after consummation of the offer, the Person in question is the Beneficial Owner of fifteen percent or more of the outstanding stock of the Company entitled to vote in the election of directors of the Company (calculated as provided in paragraph (d) of Rule 13d-3 under the Act in the case of rights to acquire stock);

          (iii) any merger, consolidation, recapitalization or reorganization of the Company approved by the stockholders of the Company shall be consummated, other than any such transaction immediately following which the persons who were the Beneficial Owners of the outstanding securities of the Company entitled to vote in the election of directors of the Company immediately prior to such transaction are the Beneficial Owners of at least 55% of the total voting power represented by the securities of the entity surviving such transaction entitled to vote in the election of directors of such entity (or the ultimate parent of such entity) in substantially the same relative proportions as their ownership of the securities of the Company entitled to vote in the election of directors of the Company immediately prior to such transaction; provided that, such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such threshold (or to preserve such relative voting power) is due solely to the acquisition of voting securities by an employee benefit plan of the Company, such surviving entity or any subsidiary of such surviving entity;

          (iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company approved by the stockholders of the Company shall be consummated; or

          (v) within any 24 month period, the persons who were directors of the Company immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to the Company, provided that any director who was not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director (A) was elected to the Board by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually or by prior operation of this clause (v), and (B) was not designated by a Person who has entered into an agreement with the Company to effect a transaction described in Section 9(a)(iii) or Section 9(a)(iv) of the Plan.

     (b) For purposes of this Plan, a Potential Change of Control shall occur if:

            (i) A Person shall commence a tender offer, which if successfully consummated, would result in such Person being the Beneficial Owner of at least 15% of the stock of the Company entitled to vote in the election of directors of the Company;

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            (ii) The Company enters into an agreement, the consummation of which would constitute a Change of Control;

            (iii) Solicitation of proxies for the election of directors of the Company by anyone other than the Company, which, if such directors were elected, would result in the occurrence of a Change of Control as described in Section 9(a)(v); or

            (iv) Any other event shall occur which is deemed to be a Potential Change of Control by the Board, the Committee, or any other appropriate committee of the Board in its sole discretion.

     (c) Notwithstanding any provision in this Plan to the contrary, upon the occurrence of a Change of Control:

            (i) Each Option and related Right outstanding on the date such Change of Control occurs, and which is not then fully vested and exercisable, shall immediately vest and become exercisable to the full extent of the original grant for the remainder of its term.

            (ii) The surviving or resulting corporation may, in its discretion, provide for the assumption or replacement of each outstanding Option and related Right granted under the Plan on terms which are no less favorable to the optionee than those applicable to the Options and Rights immediately prior to the Change of Control. If the surviving or resulting corporation offers to assume or replace the Options and Rights, the optionee may elect to have his or her Options and Rights assumed or replaced, in whole or in part, or to surrender on the date the Change of Control occurs his or her Options and Rights, in whole or in part, for cash equal to the excess of the Formula Price over the exercise price.

            (iii) In the event the successor corporation does not offer to assume or replace the outstanding Options and Rights as described in Section 9(b)(ii) hereof, each Option and Right will be exercised on the date such Change of Control occurs for cash equal to the excess of the Formula Price over the exercise price.

            (iv) The restrictions applicable to shares of Restricted Stock held by Key Employees pursuant to Section 7 shall lapse upon the occurrence of a Change of Control, and such Key Employees shall be entitled to elect, at any time during the 60 calendar days following such Change of Control, to receive immediately after the date the Key Employee makes such election either of the following: (A) unrestricted certificates for all of such shares, or (B) a lump sum cash amount equal to the number of such shares multiplied by the Formula Price. If a Key Employee does not make any election during the foregoing 60 day period, such Key Employee shall be deemed to have made the election described in Section 9(b)(vi)(A) as of the 60th day of such period, and unrestricted certificates shall be issued to such Key Employee immediately following such day as described in Section 9(b)(vi)(A) hereof.

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            (v) If a Change of Control occurs during the course of a Performance Period or any Restriction Period applicable to an Award of Performance Shares pursuant to Section 6, then a Key Employee shall be deemed to have satisfied the Performance Objectives and to have completed any applicable Restriction Period effective on the date of such occurrence. Such Key Employee shall be paid, immediately following the occurrence of such Change of Control, a lump sum cash amount equal to the number of outstanding Performance Shares awarded to such Key Employee multiplied by the Formula Price.

     (d) Notwithstanding any provision in this Plan to the contrary, in the event of a Change of Control as described in Section 9(b)(iii) or Section 9(b)(iv) of the Plan, in the case of an awardee whose employment or service involuntarily terminates on or after the date of a shareholder approval described in either of such Sections but before the date of a consummation described in either of such Sections, the date of termination of such an awardee’s employment or service shall be deemed for purposes of the Plan to be the day following the date of the applicable consummation.

10. Beneficiary

     (a) Each Key Employee, Director and/or his or her Transferee may file with the Company a written designation of one or more persons as the Beneficiary who shall be entitled to receive the Award, if any, payable under the Plan upon his or her death. A Key Employee, Director or Transferee may from time to time revoke or change his or her Beneficiary designation without the consent of any prior Beneficiary by filing a new designation with the Company. The last such designation received by the Company shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Company prior to the Key Employee’s, Director’s or Transferee’s death, as the case may be, and in no event shall it be effective as of a date prior to such receipt.

     (b) If no such Beneficiary designation is in effect at the time of death of a Key Employee, Director or Transferee, as the case may be, or if no designated Beneficiary survives the Key Employee, Director or Transferee or if such designation conflicts with applicable law, the estate of the Key Employee, Director or Transferee, as the case may be, shall be entitled to receive the Award, if any, payable under the Plan upon his or her death. If the Committee is in doubt as to the right of any person to receive such Award, the Company may retain such Award, without liability for any interest thereon, until the Committee determines the rights thereto, or the Company may pay such Award into any court of appropriate jurisdiction and such payment shall be a complete discharge of the liability of the Company therefor.

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11. Administration of the Plan

     (a) All decisions, determinations or actions of the Committee made or taken pursuant to grants of authority under the Plan shall be made or taken in the sole discretion of the Committee and shall be final, conclusive and binding on all persons for all purposes.

     (b) The Committee shall have full power, discretion and authority to interpret, construe and administer the Plan and any part thereof, and its interpretations and constructions thereof and actions taken thereunder shall be, except as otherwise determined by the Board, final, conclusive and binding on all persons for all purposes.

     (c) The Committee’s decisions and determinations under the Plan need not be uniform and may be made selectively among Key Employees, whether or not such Key Employees are similarly situated.

     (d) The Committee may, in its sole discretion, delegate such of its powers as it deems appropriate to the Company’s Group Senior Vice President, Human Resources (or other person holding a similar position) or the Company’s Chief Executive Officer, except that Awards to executive officers shall be made, and matters related thereto shall be determined, solely by the Committee or the Board or any other appropriate committee of the Board.

     12. Amendment, Extension or Termination

     The Board or the Committee may, at any time, amend or modify the Plan and, specifically, may make such modifications to the Plan as it deems necessary to avoid the application of Section 162(m) of the Code and the Treasury regulations issued thereunder. However: (i) with respect only to Incentive Stock Options, no amendment shall, without approval by a majority of the Company’s stockholders, (A) alter the group of persons eligible to participate in the Plan, or (B) except as provided in Section 13 increase the maximum number of shares of Stock which are available for Awards under the Plan; or, (ii) with respect to all Options, allow the Committee to reprice the Options. The Board may suspend or terminate the Plan at any time without the consent of such person. Notwithstanding anything in this Plan to the contrary, the Plan shall not be amended, modified, suspended or terminated during the period in which a Change of Control is threatened. For purposes of the preceding sentence, a Change of Control shall be deemed to be threatened for the period beginning on the date of any Potential Change of Control, and ending upon the earlier of: (I) the second anniversary of the date of such Potential Change of Control, (II) the date a Change of Control occurs, or (III) the date the Board or the Committee determines in good faith that a Change of Control is no longer threatened. Further, notwithstanding anything in this Plan to the contrary, no amendment, modification, suspension or termination following a Change of Control shall adversely impair or reduce the rights of any person with respect to a prior Award without the consent of such person.

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13. Adjustments in Event of Change in Common Stock

     In the event of any reorganization, merger, recapitalization, consolidation, liquidation, stock dividend, stock split, reclassification, combination of shares, rights offering, split-up or extraordinary dividend (including a spin-off) or divestiture, or any other change in the corporate structure or shares, the Committee may make such adjustment in the Stock subject to Awards, including Stock subject to purchase by an Option, or the terms, conditions or restrictions on Stock or Awards, including the price payable upon the exercise of such Option and the number of shares subject to restricted stock awards, as the Committee deems equitable.

14. Miscellaneous

     (a) If a Change of Control has not occurred and if the Committee determines that a Key Employee has taken action inimical to the best interests of any Participating Company, the Committee may, in its sole discretion, terminate in whole or in part such portion of any Option (including any related Right) as has not yet become exercisable at the time of termination, terminate any Performance Share Award for which the Performance Period or any applicable Restriction Period has not been completed or terminate any Award of Restricted Stock for which the Restriction Period has not lapsed.

     (b) Except as provided in Section 9, nothing in this Plan or any Award granted hereunder shall confer upon any employee any right to continue in the employ of any Participating Company or interfere in any way with the right of any Participating Company to terminate his or her employment at any time. No Award payable under the Plan shall be deemed salary or compensation for the purpose of computing benefits under any employee benefit plan or other arrangement of any Participating Company for the benefit of its employees unless the Company shall determine otherwise. No Key Employee shall have any claim to an Award until it is actually granted under the Plan. To the extent that any person acquires a right to receive payments from the Company under this Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as provided in Section 7(e) with respect to Restricted Stock.

     (c) The Committee shall have the right to make such provisions as deemed appropriate in its sole discretion to satisfy any obligation of the Company to withhold federal, state or local income or other taxes incurred by reason of the operation of the Plan or an Award under the Plan, including but not limited to at any time: (i) requiring a Key Employee to submit payment to the Company for such taxes before making settlement of any Award of Stock or other amount due under the Plan, (ii) withholding such taxes from wages or other amounts due to the Key Employee before making settlement of any Award of Stock or other amount due under the Plan, (iii) making settlement of any Award of Stock or other amount due under the Plan to a Key Employee

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part in Stock and part in cash to facilitate satisfaction of such withholding obligations, or (iv) receiving Stock already owned by, or withholding Stock otherwise due to, the Key Employee in an amount determined necessary to satisfy such withholding obligations; provided, however, that, notwithstanding any language herein to the contrary, any Key Employee who is an executive officer of the Company (within the meaning of Section 16 of the Act) shall have the right to satisfy his or her obligations to the Company pursuant to this Section 14(c) by instructing the Company not to deliver to the Key Employee Stock otherwise deliverable to the Key Employee in an amount sufficient to satisfy such obligations to the Company.

     (d) The Plan and the grant of Awards shall be subject to all applicable federal and state laws, rules, and regulations and to such approvals by any government or regulatory agency as may be required.

     (e) The terms of the Plan shall be binding upon the Company and its successors and assigns.

     (f) Captions preceding the sections hereof are inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provision hereof.

15. Effective Date, Term of Plan and Shareholder Approval

     The effective date of the Plan shall be May 18, 2000. No Award shall be granted under this Plan after the Plan’s termination date. The Plan’s termination date shall be the earlier of: (a) May 18, 2010, or (b) the date on which the Maximum Limit (as defined in Section 3 of the Plan) is reached; provided, however, that the Plan will continue in effect for existing Awards as long as any such Award is outstanding.

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ADMINISTRATION

     The Plan is administered by the Committee of the Board, the members of which serve at the pleasure of the Board. The Committee is composed of directors none of whom is an officer or employee of any Participating Company.

FEDERAL TAX TREATMENT

     The following is a brief summary of the current Federal income tax rules generally applicable to Options, Rights, Performance Shares and Restricted Stock. The following summary does not include any discussion of state, local or foreign income tax consequences or the effect of gift, estate or inheritance taxes, any of which may be significant to a particular individual Award recipient. In addition, this summary does not apply to every specific transaction that may occur. Awardees should consult their own tax advisors for precise advice pertaining to his or her particular circumstances regarding the specific tax consequences applicable to them.

A. Options and Rights

     Options granted under the Plan may be either non-qualified options or incentive Stock Options qualifying under Section 422A of the Code.

Non-qualified Options

     An optionee is not subject to Federal income tax upon grant of a non-qualified Option. At the time of exercise, the optionee will realize compensation income (subject to withholding) to the extent that the then fair market value of the stock exceeds the Option exercise price. The amount of such income will constitute an addition to the optionee’s tax basis in the optioned stock. Sale of the shares will result in capital gain or loss (long-term or short-term depending on the optionee’s holding period). The Company is entitled to a Federal tax deduction at the same time and to the same extent that the optionee realizes compensation income.

Incentive Stock Options

     Options under the Plan denominated as Incentive Stock Options are intended to constitute incentive stock options under Section 422A of the Code. An optionee is not subject to Federal income tax upon either the grant or exercise of an Incentive Stock Option. If the optionee holds the shares acquired upon exercise for at least one year after issuance of the optioned shares and until at least two years after grant of the option, then the difference between the amount realized on a subsequent sale or other taxable disposition of the shares and the option price will constitute long-term capital gain or loss. To obtain favorable tax

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treatment, an Incentive Stock Option must be exercised within three months after termination of employment (other than by retirement, disability, or death) with the Company or a 50% subsidiary. To obtain favorable tax treatment, an Incentive Stock Option must be exercised within three months of retirement or within one year of cessation of employment for disability (with no limitation in the case of death), notwithstanding any longer exercise period permitted under the terms of the Plan. The Company will not be entitled to a Federal tax deduction with respect to the grant or exercise of the Incentive Stock Option.

     If the optionee sells the shares acquired under an Incentive Stock Option before the requisite holding period, he or she will be deemed to have made a “disqualifying disposition” of the shares and will realize compensation income in the year of disposition equal to the lesser of the fair market value of the shares at exercise or the amount realized on their disposition over the exercise price for the Option. (However, if the disposition is by gift or by sale to a related party, the compensation income must be measured by the value of the shares at exercise over the exercise price.) Any gain recognized upon a disqualifying disposition in excess of the ordinary income portion will constitute either short-term or long-term capital gain. In the event of a disqualifying disposition, the Company will be entitled to a Federal tax deduction in the amount of the compensation income realized by the optionee.

     The option spread on the exercise of an Incentive Stock Option is an adjustment in computing alternative minimum taxable income. No adjustment is required, however, if the optionee made a disqualifying disposition of the shares in the same year as he or she is taxed on the exercise.

Rights

     Rights may have been awarded to officers and directors of The Hartford subject to Section 16(b) of the Act with respect to both Incentive Stock Options and non-qualified Options granted under the Plan. An optionee is not taxed upon the grant of Rights. An optionee exercising Rights for cash will realize compensation income (subject to withholding) in the amount of the cash received. The Company is entitled to a tax deduction at the same time and to the same extent that the optionee realizes compensation income.

B. Performance Shares

     An awardee of Performance Shares will generally realize compensation income (subject to withholding) when and to the extent that payment is made, whether in the form of cash or shares of Stock. To the extent that payment is made in the form of Stock, income shall be measured by the then fair market value of the shares, which shall constitute an addition to the awardee’s tax basis in such shares. The Company will be entitled to a Federal tax deduction for the value of payment at the time of payment.

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C. Restricted Stock

     An awardee of Restricted Stock normally will not realize taxable compensation income and the Company will not be entitled to a deduction upon the grant of restricted stock. At the time the shares of restricted stock are no longer subject to a substantial risk of forfeiture (as defined in the Code) or become transferable, an awardee will realize taxable ordinary compensation income (subject to tax withholding) in an amount equal to the fair market value of such number of shares of Stock which have become nonforfeitable or transferable and the Company will be entitled to a deduction in the same amount, provided the Company complies with applicable tax withholding requirements. However, an awardee may make an income recognition election under Section 83(b) of the Code (an “83(b) Election”) and recognize taxable ordinary compensation income (subject to tax withholding) in the year the shares of restricted stock are awarded in an amount equal to their fair market value at the time of the award, determined without regard to the restrictions. In that event, the Company will be entitled to a deduction in such year in the same amount, provided the Company complies with applicable tax withholding requirements, and any gain or loss realized by the employee upon the subsequent disposition of Stock will be capital gain or loss and will not result in any further deduction to the Company.

     Any dividends with respect to the shares of restricted stock that are paid or made available to an awardee who has not made an 83(b) Election while the shares remain forfeitable are treated as additional compensation taxable as ordinary compensation income (subject to withholding) to the awardee and deductible by the Company when paid. If an 83(b) Election has been made with respect to the restricted stock, the dividends represent ordinary dividend income to the awardee and are not deductible by the Company. If the awardee makes an 83(b) Election and subsequently forfeits the shares of restricted stock, the awardee is not entitled to a deduction as a consequence of such forfeiture for taxes previously paid on the award of restricted shares, and the Company must include as ordinary income the amount it previously deducted in the year of grant with respect to such shares.

D. Golden Parachute Tax Penalties

     Options, Rights, Performance Shares or Restricted Stock which are granted, accelerated or enhanced upon the occurrence of a Change of Control may give rise, in whole or in part, to “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code and, to such extent, will be nondeductible by the Company and subject to a 20% excise tax to the awardee.

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RESALE RESTRICTIONS

Except for the restrictions on Restricted Stock under Section 7, the Plan contains no restrictions on the resale of Stock issued in settlement of an Award. However, affiliates of the Company, which may include directors and certain officers of the Company, may not reoffer or resell shares of Stock in a transaction which is not registered under the Securities Act of 1933, as amended (the “Securities Act”), except pursuant to Rule 144 under the Securities Act or another exemption thereunder. Rule 144 requires, among other things, that (1) any sales of Stock by an affiliate must be through a broker, and (2) Securities and Exchange Commission Form 144 must be mailed to the Securities and Exchange Commission prior to or concurrently with the placing of a sell order with the broker if the amount sold during any three month period exceeds 500 shares or has an aggregate sale price of more than $10,000.

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EX-15.01

Exhibit 15.01

May 3, 2004

To the Board of Directors and Stockholders of
The Hartford Financial Services Group, Inc.
Hartford, Connecticut

We have made a review, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim financial information of The Hartford Financial Services Group, Inc. and subsidiaries (the “Company”) for the periods ended March 31, 2004 and 2003, as indicated in our report dated May 3, 2004; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in the Company’s Quarterly Report on Form 10-Q for the first quarter ended March 31, 2004, is incorporated by reference in the following registration statements:

Form S-3 Registration No.	Form S-8 Registration Nos.
333-108067		333-105707
		333-049170
		333-105706
		333-034092
		033-080665
		333-012563

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

DELOITTE & TOUCHE LLP
Hartford, Connecticut

EX-31.01

Exhibit 31.01

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ENACTED BY SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ramani Ayer, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of The Hartford Financial Services Group, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	[Paragraph omitted in accordance with SEC transition instructions contained in SEC Release 34-47986];
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2004

/s/ Ramani Ayer  

Ramani Ayer 

Chairman, President and Chief Executive Officer 

EX-31.02

Exhibit 31.02

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ENACTED BY SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David M. Johnson, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of The Hartford Financial Services Group, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	[Paragraph omitted in accordance with SEC transition instructions contained in SEC Release 34-47986];
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2004

/s/ David M. Johnson  

David M. Johnson 

Executive Vice President and Chief Financial Officer 

EX-32.01

EXHIBIT 32.01

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ENACTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the period ended March 31, 2004 of The Hartford Financial Services Group, Inc. (the “Company”), filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. section 1350 as enacted by section 906 of the Sarbanes-Oxley Act of 2002, that:

1)	The Report fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934; and
2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 4, 2004

/s/ Ramani Ayer  

Ramani Ayer 

Chairman, President and Chief Executive Officer 

EX-32.02

Exhibit 32.02

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ENACTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the period ended March 31, 2004 of The Hartford Financial Services Group, Inc. (the “Company”), filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. section 1350 as enacted by section 906 of the Sarbanes-Oxley Act of 2002, that:

1)	The Report fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934; and
2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 4, 2004

/s/ David M. Johnson  

David M. Johnson 

Executive Vice President and Chief Financial Officer