The Hartford 2007 Annual Report Download - page 252

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
F-75
17. Pension Plans and Postretirement Health Care and Life Insurance Benefit Plans (continued)
Benefit Payments
The following table sets forth amounts of benefits expected to be paid over the next ten years from the Company’ s pension and other
postretirement plans as of December 31, 2007:
Pension Benefits Other Postretirement Benefits
2008 $ 187 $34
2009 202 35
2010 215 36
2011 228 37
2012 246 37
2013-2017 1,384 186
Total $ 2,462 $365
In addition, the following table sets forth amounts of other postretirement benefits expected to be received under the Medicare Part D
Subsidy over the next ten years as of December 31, 2007:
2008 $3
2009 4
2010 4
2011 4
2012 5
2013-2017 30
Total $50
18. Stock Compensation Plans
The Company has two primary stock-based compensation plans which are described below. Shares issued in satisfaction of stock-
based compensation may be made available from authorized but unissued shares, shares held by the Company in treasury or from
shares purchased in the open market. The Company typically issues new shares in satisfaction of stock-based compensation. The
compensation expense recognized for the stock-based compensation plans was $72, $61 and $56 for the years ended December 31,
2007, 2006, and 2005, respectively. The income tax benefit recognized for stock-based compensation plans was $23, $20 and $18 for
the years ended December 31, 2007, 2006 and 2005, respectively. The Company did not capitalize any cost of stock-based
compensation. As of December 31, 2007, the total compensation cost related to non-vested awards not yet recognized was $78, which
is expected to be recognized over a weighted average period of 2.0 years.
Stock Plan
In 2005, the shareholders of The Hartford approved The Hartford 2005 Incentive Stock Plan (the “2005 Stock Plan”), which superseded
and replaced The Hartford Incentive Stock Plan and The Hartford Restricted Stock Plan for Non-employee Directors. The terms of the
2005 Stock Plan are substantially similar to the terms of the superseded plans.
The 2005 Stock Plan provides for awards to be granted in the form of non-qualified or incentive stock options qualifying under Section
422 of the Internal Revenue Code, stock appreciation rights, performance shares, restricted stock, restricted stock units, or any
combination of the foregoing. The aggregate number of shares of stock, which may be awarded, is subject to a maximum limit of
seven million shares applicable to all awards for the ten-year period ending May 18, 2015. To the extent that any awards under the
2005 Stock Plan, The Hartford Incentive Stock Plan or The Hartford Restricted Stock Plan for Non-employee Directors are forfeited,
terminated, expire unexercised or are settled for cash in lieu of stock, the shares subject to such awards (or the relevant portion thereof)
shall be available for awards under the 2005 Stock Plan and shall be added to the total number of shares available under the 2005 Stock
Plan. As of December 31, 2007, there were 5,618,538 shares available for future issuance.
The fair values of awards granted under the 2005 Stock Plan are measured as of the grant date and expensed ratably over the awards’
vesting periods, generally three years. For stock option awards granted or modified in 2006 and later, the Company began expensing
awards to retirement-eligible employees hired before January 1, 2002 immediately or over a period shorter than the stated vesting
period because the employees receive accelerated vesting upon retirement and therefore the vesting period is considered non-
substantive. If, prior to the adoption of SFAS 123(R), the Company had been expensing stock option awards to retirement-eligible
employees over the shorter of the stated vesting period or the date of retirement eligibility, then the Company would have recognized