SEPARATION AGREEMENT AND GENERAL RELEASE
Exhibit 10.01
EXECUTION VERSION
February 24, 2009
SEPARATION AGREEMENT AND GENERAL RELEASE
| 1.0 | PREAMBLE |
| 1.1 | You, Xxxxxx X. Xxxxx (“you” or “your”) and management of The Hartford Financial
Services Group, Inc., including its direct and indirect subsidiaries, (“The Hartford”),
have had a series of conversations about your employment. As a result of those
conversations, and consistent with the terms of the Amended and Restated Employment
Agreement dated September 7, 2006 (“2006 Employment Agreement”), as well as the October
31, 2008 Amendment to the 2006 Employment Agreement (“Amendment”), you and The Hartford
agree to enter into this Separation Agreement and General Release (the “Agreement”)
under the following terms. The terms of the 2006 Employment Agreement and the
Amendment, including but not limited to The Hartford’s and your obligations under
Section 10(j) of the 2006 Employment Agreement, as amended by the Amendment, if The
Hartford or any of its subsidiaries participates in the Troubled Assets Relief Program
or any similar program under the Emergency Economic Stabilization Act of 2008 or
similar legislation, apply in all cases except as otherwise provided below. For the
avoidance of doubt, nothing in this Agreement is intended to be duplicative of any of
the amounts that would otherwise be payable to you under the 2006 Employment Agreement. |
| 1.2 | You and The Hartford have mutually agreed that your employment will terminate
as a Termination Without Cause (as defined in Section 5(d) the 2006 Employment
Agreement) effective July 3, 2009 (“Separation Date”), at which point you will be
eligible to and will retire from The Hartford. |
| 1.3 | Following the Separation Date, you will receive payments and benefits per your
2006 Employment Agreement as provided for a Termination Without Cause with retirement
eligibility. |
| 2.0 | THE HARTFORD’S OBLIGATIONS |
| 2.1 | Transition Period and Separation Date. You will remain employed with
your current title during a transition period continuing through the Separation Date
(“Transition Period”). |
| 2.1.1. | Duties. During the Transition Period, you will perform services
commensurate with your position, skills and experience as assigned by the Chief
Executive Officer, including participating in meetings as reasonably requested
and supporting organizational changes that are underway. During the Transition
Period, you will be allowed a reduced schedule as mutually agreed by you and
management, but in no event shall such work amount be less than twenty percent
(20%) of the average amount of time
that you provided services to The Hartford for the three (3) year period
immediately before the Transition Period. The Hartford warrants that it
will assign you services as provided above so that you satisfy the above
minimum requirements. |
| 2.1.2 | New Opportunities. During the Transition Period, you
shall be permitted to explore future employment opportunities, including doing
preliminary work on new business opportunities, which are intended to begin
following the Separation Date, provided that you do not receive any
compensation during the Transition Period for any such activities or become an
employee of any person or entity other than The Hartford during the Transition
Period. Section 9(a) of the 2006 Employment Agreement or any similar provision
in any other agreement with The Hartford (including without limitation in any
equity grants or benefit plans) shall not apply to such activities. |
| 2.2 | Payments |
| 2.2.1 | Transition Pay. During the Transition Period
described above, you will continue to be paid your current base salary amount,
minus required withholding for taxes and deductions (“Transition Pay”). |
| 2.2.2 | Severance Payment. In accordance with Section 5 of
the 2006 Employment Agreement in connection with a Termination Without Cause,
you will receive a one-time lump sum payment equal to two times the sum of your
current base salary and 2009 target bonus (“Severance Payment”). The Severance
Payment will be paid within the 10-day period following January 4, 2010. This
Severance Payment will not be considered earnings for purposes of The
Hartford’s benefit plans. |
| 2.2.3 | Vested Benefits Enhancement. Since your Termination
Without Cause will occur after July 1, 2009, you acknowledge that you will not
be entitled to the Vested Benefits Enhancement (as defined in Section 5(d) of
the 2006 Employment Agreement) upon such termination. |
| 2.2.4 | Bonus. As previously discussed, you will not receive
a bonus for 2008, but you will receive a pro rata target bonus for 2009
following the Separation Date. This bonus will not be considered earnings for
purposes of The Hartford’s benefit plans. This bonus shall be paid in
accordance with the terms of the 2006 Employment Agreement. |
| 2.3 | Other Benefits and Compensation. During and after the Transition
Period, you will be eligible for certain employee benefit plans only as detailed below. |
| 2.3.1 | Pension. You will receive pension payments in
accordance with the Rule of 80 pursuant to the terms of the applicable pension
plans. Subject to you providing services pursuant to Section 2.1.1 above, The
Hartford represents that you will satisfy the Rule of 80. |
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| 2.3.2 | LongTerm Incentives. You will not receive an equity
award for 2009. Otherwise, all of your outstanding equity and equity-based
awards will continue to operate in accordance with the terms of the applicable
plan and the underlying agreements. Your employment will continue through the
end of the Transition Period to the extent relevant in determining your rights
in respect of these awards and agreements. |
| 2.3.2.1 | HIG Restricted Stock Units. Restricted stock units will
vest pro rata as of the Separation Date. |
| 2.3.2.2 | Stock Options. Unvested stock options will be treated in
accordance with Section 5(d) of your 2006 Employment Agreement as
applicable to a Termination Without Cause, based on retirement
eligibility as of the Separation Date. |
| 2.3.2.3 | Performance Shares. Performance shares will vest pro rata
as of the Separation Date, based on retirement eligibility. |
| 2.3.2.4 | Restricted Stock. All restrictions on any outstanding
shares will immediately lapse on the Separation Date. |
| 2.4 | Paid Time Off (“PTO”). During the Transition Period, you will be
deemed to have used any 2008 carryover and/or 2009 accrued PTO such that as of your
Separation Date, there will be no accrued PTO remaining to be paid. |
| 2.5 | Income Protection and Business Travel Accident Plans. Pursuant to the
terms of the applicable plan, you are covered under these plans only for a disability
arising or an accident occurring through the last day you are actively working. You
will be considered actively working during the Transition Period. |
| 2.6 | Welfare Benefits Continuation and Retiree Health. Following the
Separation Date, you will receive Welfare Benefits Continuation as provided in Section
5(d) of your 2006 Employment Agreement. During the Transition Period, your welfare
benefits will continue in the same manner and to the same extent as immediately prior
to beginning of the Transition Period, except to the extent such welfare benefits are
modified for all executive officers of The Hartford. The Hartford acknowledges that
you have qualified for retiree health and shall have the rights to such benefits upon
any termination, subject to the terms of the applicable retiree heath plan as modified
from time to time. |
| 2.7 | Outplacement Assistance. The Hartford will provide you with twelve
(12) months of outplacement services through an executive outplacement firm to be
selected by The Hartford and by you. To initiate the process, please contact Xxxxxx
Xxxxxxx at (000) 000-0000. You may begin utilizing these services at any time
following your execution of this Agreement. |
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| 3.0 | YOUR OBLIGATIONS |
| 3.1 | Trade Secrets and Confidential Information. You agree to abide by the
terms and provisions as set forth in Section 9(b) of the 2006 Employment Agreement. |
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You hereby acknowledge your obligations under The Hartford’s Xxxxxxx Xxxxxxx
Policies, which will remain in effect and enforceable, notwithstanding Section 5.4,
the termination of your employment with The Hartford or the occurrence of the
Separation Date. You further agree that your obligations under The Hartford’s
Xxxxxxx Xxxxxxx Policies shall continue until the second trading day following the
filing by The Hartford with the SEC of The Hartford’s quarterly report on Form 10-Q
for the quarter ended September 30, 2009. |
| 3.2 | Return of Hartford Property. You agree to abide by the terms and
provisions as set forth in Section 9(d) of the 2006 Employment Agreement. |
| 3.3 | No Assistance. You agree that neither you nor anyone acting at your
direction will knowingly and intentionally encourage or induce any person or entity,
including but not limited to any past, present, or prospective employee, consultant,
contractor, vendor, supplier, customer or competitor of any Hartford Entity to bring
claims, complaints or suits of any kind whatsoever against said entities relating to
matters related to your employment period with The Hartford. You further agree that
you will not knowingly or intentionally provide information or consulting advice or
assist in any manner any such person or entity asserting any claim relating to matters
related to your employment period with The Hartford against or relating to any Hartford
Entity with regard to such claim unless compelled to do so by a subpoena of a court of
competent jurisdiction or in connection with a governmental or regulatory inquiry. |
| 3.4 | Cooperation. Following the termination of your employment, you may,
from time to time, be called upon by The Hartford or its representatives to furnish
information and/or reasonable assistance concerning matters on which you worked in the
past. Without additional compensation for your time, you agree, upon reasonable notice
and at times mutually convenient, to render such assistance if requested. You
expressly agree to make yourself reasonably available at the request of The Hartford to
provide information and/or reasonable assistance and cooperation in any investigations
of any Hartford Entity and the defense of any litigation against any Hartford Entity
relating to matters with which you were involved or have knowledge of as a result of
your employment with The Hartford; provided, however, the timing and location of such
cooperation shall be in a manner that does not interfere with your business or
employment obligations. The Hartford will reimburse you for all reasonable expenses
incurred in connection with rendering any such assistance. You shall not be obligated
to perform the services provided for in this Section 3.4 to the extent any
investigation or matter in your good faith judgment could create a claim against you
personally for which you are not fully indemnified by The
Hartford and fully covered by The Hartford’s directors and officers liability
insurance. |
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| 3.5 | 2006 Employment Agreement. Your obligations as set forth in this
Section 3.0 are in addition or a supplement to, and not in replacement of, your duties,
obligations and covenants under Section 9 of the 2006 Employment Agreement, which are
hereby affirmed, except as otherwise provided herein, and will continue in full force
and effect. |
| 4.0 | RELEASE |
| 4.1 | In General. You fully, irrevocably and unconditionally release all
Claims (as such term is defined in Section 4.3), and irrevocably agree not to bring any
Claim that you may have against the Released Parties. You also agree as a condition to
the receipt of the amounts otherwise payable to you under Section 2.2.2 to execute an
additional release, within 30 days following the expiration of the Transition Period,
in favor of the Released Parties (as defined below) and covering any claims (other than
those excepted from such release) that may arise from the date hereof until the end of
the Transition Period (and including your termination of employment as of the end of
the Transition Period) and which shall be substantially in the form of the release
contained in this Section 4.0 and is not broader or impose additional obligations to
you other than as provided in this Section 4.0. |
| 4.2 | Released Parties. The Released Parties means each Hartford Entity, all
of their current and former parents, subsidiaries, related companies, partnerships,
joint ventures, or other affiliates, and, with respect to each of them, their
predecessors and successors; and, with respect to each such entity and limited to such
capacities, all of its past, present, and future employees, officers, directors,
stockholders, owners, representatives, assigns, attorneys, agents, insurers, employee
benefit programs (and the trustees, administrators, fiduciaries, and insurers of such
programs), and any other persons acting by, through, under or in concert with any of
the persons or entities listed in this subsection, and their successors. |
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| 4.3 | Claims Released. For purposes of this agreement, “Claims” means all
known and unknown claims, promises, causes of action, obligations, judgments, damages,
liabilities or similar rights of any type that you presently may have or that may
hereafter arise, of whatever kind or character, both in law and in equity (“Claims”),
in respect of any matter, cause, or thing that you now have or may have arising out of
or in connection with your employment with The Hartford existing up to the Separation
Date, and without limiting the generality of the foregoing, in respect to all matters
which could be raised in a court of competent jurisdiction, with respect to the
Released Parties. You understand that the Claims you are releasing might arise under
many different foreign, domestic, national, state, or local laws (including statutes,
regulations, other administrative guidance, and common law doctrines), such as the
following: |
| • | Anti-discrimination statutes, such as the Age Discrimination in Employment
Act (“ADEA”) and Executive Order 11,141, which prohibit age discrimination in
employment; Title VII of the Civil Rights Act of 1964, Sections 1981 and 1983
of the Civil Rights Act of 1866, and Executive Order 11,246, which prohibit
discrimination based on race, color, national origin, religion, or sex; the
Equal Pay Act, which prohibits paying men and women unequal pay for equal work;
the Americans With Disabilities Act and Sections 503 and 504 of the
Rehabilitation Act of 1973, which prohibit discrimination based on disability;
and any other federal, state, or local laws prohibiting discrimination. |
| • | Federal employment statutes, such as the WARN Act, which require that
advance notice be given of certain work force reductions; the Employee
Retirement Income Security Act of 1974, which, among other things, protects
employee benefits; the Fair Labor Standards Act of 1938, which regulates wage
and hour matters; the Family and Medical Leave Act of 1993, which requires
employers to provide leaves of absence under certain circumstances; and any
other federal laws relating to employment, such as veterans’ reemployment
rights laws. |
| • | Other laws, such as any federal, state, or local laws providing workers’
compensation benefits, mandating leaves of absence, restricting an employer’s
right to terminate employees, or otherwise regulating employment; any federal,
state, or local law enforcing express or implied employment contracts or
requiring an employer to deal with employees fairly or in good faith; any other
federal, state, or local laws providing recourse for alleged wrongful
discharge, tort, physical or personal injury, emotional distress, fraud,
negligent misrepresentation, defamation, and similar or related claims. |
| 4.4 | Unknown Claims. You understand that you are releasing Claims that you
may not know about. That is your knowing and voluntary intent even though you
recognize that someday you might regret having signed this Release. Nevertheless, you
are assuming that risk and you agree that this Release shall remain effective in all
respects in any such case. You expressly waive all rights you might have under any law
that is intended to protect you from waiving unknown claims (such as California Civil
Code Section 1542). You understand the significance of doing so. |
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| 4.5 | Exclusions. This Section 4.0, however, shall not affect: (i) any
rights that you may have under this Agreement; (ii) your right of indemnification, to
directors and officers liability insurance coverage and to advancement of legal fees
(as provided in Section 4(e) of the 2006 Employment Agreement, in any other agreement,
policy or plan, or in any organizational document, at law or otherwise); (iii) vested
benefits under any employee benefit plan, policy or arrangement, including but not
limited to those set forth in the last section of this Section 4.5; (iv) your right to
retiree health benefits (subject to the terms of the
applicable retiree heath plan as modified from time to time); (v) any claims or
rights that cannot be waived by law; (vi) your rights as shareholder of The
Hartford; or (vii) your rights to (A) any compensation that is earned but unpaid;
(B) any business expense reimbursement that has been incurred but unpaid, (C) the
vesting and exercise of any equity grant; or (D) any payment under Section 6(f) of
the 2006 Employment Agreement, if any. It shall also not affect any rights that you
may have under: |
| • | The Hartford’s Retirement Plan for U.S. Employees; |
| • | The Hartford Excess Pension Plan II; |
| • | The Hartford Investment and Savings Plan; |
| • | any Hartford liability insurance policy as an insured; |
| • | the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) to
continue group health coverage; or |
| • | state worker’s compensation laws to receive benefits for compensable
injuries, |
| 5.0 | MISCELLANEOUS |
| 5.1 | Modification. This Agreement may be modified only by a written
amendment duly signed by both parties. |
| 5.2 | Severability. If a court of competent jurisdiction or any arbitral
panel finds that any provision of this Agreement is invalid, illegal or unenforceable,
in any respect, then such invalidity, illegality or unenforceability shall not affect
or impair any other remaining provisions of this Agreement and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had not been contained
herein. Moreover, if a court of competent jurisdiction or arbitral panel finds that
any provision of this Agreement is excessively broad, then such provision shall be
construed by limiting it so as to be enforceable to the extent compatible with
applicable law. |
| 5.3 | No Waiver. The waiver by either party of a breach of any provision of
this Agreement shall not operate as, or be construed as, a waiver of any subsequent
breach. |
| 5.4 | All Terms. This Agreement embodies the entire understanding of the
parties with respect to the subject matter hereof, and there are no other agreements or
understandings, oral or written, between the parties with regard to the subject matter
hereof, with the exception of the 2006 Employment Agreement and the Amendment. |
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| 5.5 | Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Connecticut. |
| 5.6 | Arbitration. Any dispute whatsoever relating to the interpretation,
validity, or performance of this Agreement, which cannot be resolved by the parties to
this Agreement, shall be resolved in accordance with the terms of the 2006 Employment
Agreement. |
| 5.7 | Notices. All notices, requests and demands given to or made pursuant
to this Agreement shall be given in accordance with the terms of the 2006 Employment
Agreement. |
| 5.8 | Injunctive Relief and Other Remedies. Section 9(e) of the 2006
Employment Agreement shall continue to apply as provided therein. |
| 5.9 | Attorney Consultation. This is a legal document that includes the
terms of your separation from The Hartford, your legal rights and a release of claims.
You are advised to consult with an attorney prior to executing this Agreement. |
| 5.10 | No Admission. This Agreement is not and shall not be considered an
admission of any wrongdoing on the part of you or The Hartford. |
| 6.0 | AFFIRMATIONS |
You affirm and agree to the following:
| 6.1 | Tax Liability. To the extent that any federal or state taxes may be
due or payable from you as a result of any payments made to you under the terms of this
Agreement, you will have sole responsibility for the payment of such taxes. |
| 6.2 | No Pending Charges or Lawsuits. You have not filed or caused to be
filed, and you presently are not a party to, any claim, complaint, or action against
The Hartford in any forum or form. |
| 6.3 | No Work-Related Injuries or Diseases. You have no known workplace
injuries or occupational diseases. |
| 6.4 | No Entitlement to Payments. But for your agreement to the terms
herein, you would not otherwise be entitled to all payments made to you by The Hartford
pursuant to this Agreement. |
| 6.5 | Comprehension of Terms. You are able to read the language and
understand the meaning and effect of this Agreement. |
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| 6.6 | Revocation. You acknowledge that you have seven (7) calendar days from
the date that you sign this Agreement to revoke it by sending written notice in
accordance with Section 5.7. Any revocation within this period must be submitted, in
writing, to the undersigned and state, “I hereby revoke my
acceptance of our Agreement and General Release.” The revocation must be personally
delivered or mailed and postmarked within seven (7) calendar days of your execution
of this Agreement. Your waiver of the claims that you have or may have under the
ADEA shall not become effective or enforceable until the revocation period has
expired. If the last day of the revocation period is a Saturday, Sunday, or a State
of Connecticut legal holiday, then the revocation period shall not expire until the
next following day which is not a Saturday, Sunday, or legal holiday. If you revoke
this Agreement, then you will be obligated to repay The Hartford the total value of
any consideration provided to you in exchange for your acceptance of this Agreement
and will thereby automatically, without the requirement of any further act by you or
The Hartford, fully, irrevocably and unconditionally waive all rights to the
performance by The Hartford of any of its obligations hereunder. |
| 6.7 | Reasonable Time to Review. You have had a reasonable time to review
and consider this Agreement and the information provided and could have had more time
up to and including twenty-one (21) calendar days from the date of this Agreement, and
you did not want or request additional time beyond the date of executing this
Agreement. Note that any modifications, material or otherwise, made to this Agreement
do not restart or affect in any manner the original twenty-one (21) calendar day
consideration period. |
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Signed this 24th day of February 2009.
Xxxxxx X. Xxxxx |
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/s/ Xxxxxx X. Xxxxx
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Witness |
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/s/ Xxxxxxx XxXxxxx-Xxxxx
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Xxxxxxx XxXxxxx-Xxxxx
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On behalf of The Hartford Financial Services Group, Inc. |
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/s/ Xxxxxx X. Xxxxxxx
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Executive Vice President, Human Resources |
Date: February 24, 2009
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