8-KMaterial Agreements

HARTFORD INSURANCE GROUP, INC. 8-K Report, Material Agreement (Jun 10, 2008)

Filed June 10, 2008For Securities:HIGHIG-PG

Summary

The Hartford Financial Services Group, Inc. (HIG) announced on June 4, 2008, a material definitive agreement to repurchase $500 million of its common stock. This agreement was executed with Credit Suisse International as a collared accelerated stock repurchase program. The company has already paid the $500 million to Credit Suisse, which will manage the buyback. The number of shares repurchased will be determined by the volume-weighted average share price during the repurchase period, with provisions for a minimum and maximum number of shares. Credit Suisse will initially deliver a minimum number of shares, and The Hartford may receive additional shares based on the stock's performance over time, subject to a cap. Shares repurchased will be held in treasury.

Key Highlights

  • 1The Hartford initiated a $500 million accelerated stock repurchase program.
  • 2The agreement was entered into with Credit Suisse International.
  • 3The company has paid the full $500 million to Credit Suisse.
  • 4The number of shares repurchased will be subject to volume-weighted average pricing with collar provisions (minimum and maximum shares).
  • 5Credit Suisse will deliver a minimum number of shares initially.
  • 6The Hartford may receive additional shares based on stock price performance.
  • 7Repurchased shares will be held as treasury stock.

Frequently Asked Questions

The company entered into this agreement to repurchase its common stock, likely as a way to return capital to shareholders, potentially boost earnings per share, and signal confidence in the company's financial position.

The exact number of shares will be determined by the volume-weighted average share price of The Hartford's common stock during the repurchase period. The agreement includes a 'collar' which sets both a minimum and maximum number of shares that will be repurchased, providing some protection against extreme price volatility for both the company and Credit Suisse.

Credit Suisse will deliver a minimum number of shares to The Hartford shortly after the minimum and maximum number of shares are determined. The company may receive additional shares over a period following this initial delivery, depending on the stock's average price.

Treasury stock refers to shares that a company has repurchased from the open market. These shares are no longer outstanding, do not carry voting rights, and do not receive dividends. Companies hold treasury stock for various reasons, such as to be reissued for stock options, employee plans, or acquisitions, or simply to reduce the number of outstanding shares.