The Hartford 2008 Annual Report Download - page 658

(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 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 Agreement 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.
(l) Each outstanding Option and Right shall be deemed to be exercised, in the manner set forth below, at the close of
business on the scheduled expiration date of such Option or Right if at such time the Option or Right by its terms remains
exercisable and, if so exercised, would result in a distribution to the holder of such Option or Right of at least one share of
Stock of the Company net of any applicable tax withholding requirements (a “Deemed Exercise”). Such Deemed Exercise
may be effected without notification by the Director or Key Employee to the Company or by the Company to the Key
Employee or Director. Upon such Deemed Exercise, the Company shall issue and deliver to the Director or Key Employee
the greatest number of whole shares of Stock equal to the quotient of (i) divided by (ii), with the quotient reduced as
necessary to satisfy any applicable tax withholding requirements, where (i) and (ii) are:
(i) The product of (x) the number of shares of Stock as to which the Option or Right is being deemed exercised
and (y) the excess of the Fair Market Value on the Deemed Exercise date over the exercise price per share of such Option or
the specified amount for such Right, and
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Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009