The Hartford 2008 Annual Report Download - page 464

Table of Contents
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
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, 2008:
Pension Benefits Other Postretirement Benefits
2009 $ 207 $ 36
2010 220 39
2011 234 40
2012 252 40
2013 261 40
2014-2018 1,460 193
Total $ 2,634 $ 388
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, 2008:
2009 $ 3
2010 3
2011 4
2012 4
2013 4
2014-2018 28
Total $ 46
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. In 2008, the Company issued shares from treasury in satisfaction of
stock-based compensation. In 2007 and 2006, the Company issued new shares in satisfaction of stock-based compensation.
The compensation expense recognized for the stock-based compensation plans was $62, $72 and $61 for the years ended
December 31, 2008, 2007, and 2006, respectively. The income tax benefit recognized for stock-based compensation plans
was $19, $23 and $20 for the years ended December 31, 2008, 2007 and 2006, respectively. The Company did not capitalize
any cost of stock-based compensation. As of December 31, 2008, the total compensation cost related to non-vested awards
not yet recognized was $68, which is expected to be recognized over a weighted average period of 1.9 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superseded and replaced The Hartford Incentive Stock Plan and The Hartford Restricted Stock Plan for Non-employee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 The terms of the 2005 Stock Plan are substantially similar to the terms of the superseded plans.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, 2008, there were
4,913,890 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. All awards provide for accelerated vesting upon a change in control of the Company as
defined in the 2005 Stock Plan.
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009