PRE-RETIREMENT DEATH BENEFIT AND SUPPLEMENTAL PENSION AGREEMENT
THIS AGREEMENT, made and entered into this 18th day of
September, 1995 between The Hartford Steam Boiler Inspection and
Insurance Company, (hereinafter referred to as the
"Corporation"), a Corporation organized and existing under the
laws of the State of Connecticut and William A. Kerr (hereinafter
referred to as the "Executive").
WHEREAS, the Executive is employed by the Corporation and is
currently serving as Senior Vice President, and
WHEREAS, the Executive has performed his duties in a capable
and efficient manner, resulting in substantial growth and
progress to the Corporation; and
WHEREAS, the Corporation desires to retain the services of
the Executive, and realizes that if he were to leave the
Corporation it could suffer a substantial financial loss; and
WHEREAS, the Executive is willing to continue in the employ
of the Corporation if the Corporation will agree to pay him or
his designees certain benefits in accordance with the provisions
and conditions hereinafter set forth; and
WHEREAS, it is now understood and agreed that this Agreement
is to be effective as of September 18, 1995;
NOW, THEREFORE, for value received and in consideration of
the mutual covenants contained herein, the parties covenant and
agree as follows:
ARTICLE I - DEFINITIONS
For purposes of this Agreement, the following terms have the
meanings set forth below:
1.1 "Change in Control," as referred to in this Agreement, means
a change in control of a nature that would be required to be
reported in response to item 5(f) of Schedule 14 of
Regulation 14A promulgated under the Securities Exchange Act
of 1934 ("Exchange Act"); provided that, without limitation,
such a change in control shall be deemed to have occurred if
(i) any "person" (as such term is used in Sections 13(d) and
14 (d)(2) of the Exchange Act) is or becomes the beneficial
owner (as defined under Rule 13-d of the Exchange Act)
directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the
Company's then outstanding securities; or (ii) during any
period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors
of the Company cease for any reason to constitute at least a
majority thereof unless the nomination for election or
election of each director, who was not a director at the
beginning of the period, was approved by a vote of at least
two-thirds of the directors then still in office who were
directors at the beginning of the period.
1.2 "Executive's Base Annual Salary" means annual salary,
exclusive of bonuses, at the date of Termination of the
Executive's Employment or the date of a Change in Control,
whichever amount is higher.
1.3 "Full-Time Employment" means employment on a full-time basis
with the Corporation or any wholly-owned subsidiary thereof.
1.4 "Retirement" means the Termination of the Executive's
Employment after attaining age 55 for any reason other than
for Cause or on account of the Executive's death.
1.5 "Termination of the Executive's Employment" means the
cessation of the Executive's Full-Time Employment for any
reason.
1.6 "Termination of the Executive's Employment for Cause" means
the Termination of the Executive's Employment after (i)
providing the Corporation with materially false reports
concerning the Executive's business interests or employment-
related activities; (ii) making materially false
representations relied upon by the Corporation in furnishing
information to shareholders, a stock exchange, or the
Securities and Exchange Commission; (iii) maintaining an
undisclosed, unauthorized and material conflict of interest
in the discharge of duties owed by the Executive to the
Corporation; (iv) misconduct causing a serious violation by
the Corporation of state and federal laws; (v) theft of
Corporate funds or corporate assets; or (vi) conviction of a
crime (excluding traffic violations and similar
misdemeanors).
1.7 "Total Disability" means the same as defined under the
Corporation's Long Term Disability Plan or if no such plan
is in effect at the time a total disability is being
determined, then the same as for the purposes of the
Executive's entitlement to Social Security benefits.
ARTICLE II - PRE-RETIREMENT DEATH BENEFIT
2.1 If the Termination of the Executive's Employment is on
account of the Executive's death, a death benefit equal to
twenty-five (25%) of the Executive's Base Annual Salary at
the time of his death will be paid subject to the
limitations under Article VII. This death benefit will be
paid by the Corporation to the beneficiary of the Executive
each year for fifteen years (15) years. The amount to be
paid each year will be paid in equal monthly installments
beginning on the first day of the month following the date
of the Executive's death and on the first day of the month
thereafter. In the event the Termination of the Executive's
Employment is on account of any event other than death, no
benefit will be paid by the Corporation under this Article
II.
ARTICLE III - SUPPLEMENTAL PENSION BENEFIT
3.1 Eligibility for Supplemental Pension Benefit on Retirement
after Age 65
If the Retirement of the Executive occurs after the
Executive has attained age 65, the Executive will be
entitled to receive an annual Supplemental Pension Benefit
under this Agreement in an amount equal to seventeen and
one-half percent (17.5%) of the Executive's Base Annual
Salary. This Supplemental Pension Benefit will be paid by
the Corporation to the Executive each year for fifteen (15)
years. The amount to be paid each year will be paid in
equal monthly installments beginning on the first day of the
month, following the date of the Retirement of the
Executive, and on the first day of each month thereafter.
3.2 Eligibility for Supplemental Pension Benefit on Retirement
after Age 55
If the Retirement of the Executive occurs after the
Executive has attained age 55 but prior to attaining age 65,
the Executive will be entitled to receive an annual
Supplemental Pension Benefit under this Agreement in an
amount equal to seventeen and one-half (17.5%) percent of
the Executive's Base Annual Salary, multiplied by the
applicable percentage set forth in Appendix A and multiplied
by the percentage set forth in Appendix B, if applicable.
This Supplemental Pension Benefit will be paid by the
Corporation to the Executive each year for fifteen (15)
years. The amount to be paid each year will be paid in
equal monthly installments beginning on the first day of the
month following the date of the Retirement of the Executive
and on the first day of each month thereafter.
3.3 Eligibility for Supplemental Pension Benefit on Total
Disability
(a) If the Termination of the Executive's Employment occurs
on account of Total Disability, the Executive will be
entitled to receive a Supplemental Pension Benefit
under this Agreement in an amount equal to seventeen
and one-half percent (17.5%) of the Executive's Base
Annual Salary reduced by any benefit to which the
Executive may be entitled under Social Security, the
Corporation's Long-Term Disability Plan payments,
Worker's Compensation awards, or any combination
thereof, on account of Total Disability. This
Supplemental Pension Benefit, if any, will be paid by
the Corporation to the Executive each year for fifteen
(15) years. The amount to be paid each year will be
paid in equal monthly installments, beginning on the
first day of the month following the date of the
Termination of the Executive's Employment, and on the
first day of each month thereafter.
(b) If, at any time during a period in which the Executive
is entitled to receive payments on account of Total
Disability, the condition of Total Disability no longer
exists, the Corporation's obligation to make any
further payments on account of Total Disability will
terminate on the date on which Total Disability no
longer exists. If the Executive resumes employment
with the Corporation following such Total Disability in
the same or a similar capacity as the Executive
occupied prior to such Total Disability, any
supplemental pension or death benefit to which the
Executive or his beneficiary otherwise becomes
entitled shall be unreduced on account of the payments
received on account of the Executive's Total Disability
hereunder.
3.4 Termination of the Executive's Employment for Cause
If the Termination of the Executive's Employment is a
Termination of the Executive's Employment for Cause,
notwithstanding any other provision of this Agreement, the
Executive will not be entitled to receive any benefits under
this Article III.
3.5 Eligibility for Supplemental Pension Benefit on Other Than
Retirement or Total Disability
Except, as provided in Article IV, if the Termination of the
Executive's Employment occurs for any reason other than
those provided in this Article III, or is for a reason
provided for in this Article III but is under circumstances
which do not meet the requirements for entitlement to a
benefit under said Article, the Executive will not be
entitled to receive a Supplemental Pension Benefit under
this Agreement.
ARTICLE IV
TERMINATION OF EXECUTIVE'S EMPLOYMENT FOLLOWING CHANGE IN CONTROL
4.1 If the Executive's employment with the Corporation is
terminated by the Corporation during the six (6) months
following a Change in Control, and is not a Termination of
the Executive's Employment for Cause or on account of the
Executive's death or Total Disability, said termination
shall be deemed a termination on account of the Retirement
of the Executive after age 65, and the Executive shall be
entitled to the benefit provided in Section 3.1 of Article
III hereof, as if the Executive had retired on the date of
such termination.
4.2 If the Termination of the Executive's Employment occurs six
(6) months or later following a Change in Control, and is
not a Termination of the Executive's Employment for Cause or
on account of the Executive's death or Total Disability,
said termination shall be deemed a termination on account of
the Retirement of the Executive after age 65, and the
Executive shall be entitled to the benefit provided in
Section 3.1 of Article III hereof, as if the Executive had
retired on the date of such termination.
ARTICLE V - BENEFICIARY OF DEATH BENEFIT OR SUPPLEMENTAL PENSION
5.1 In the event that the termination of the Executive's
employment with the Corporation is on account of the
Executive's death or that the Executive should die prior to
receipt of any amounts(s) due or remaining to be paid under
Article III of this Agreement, the death benefit payable
under Article II or any amounts remaining payable under
Article III, shall be paid at the times and in the manner
specified under the terms of Article II or Article III, as
applicable, to such beneficiary or beneficiaries as the
Executive may have designated by filing with the Corporation
a notice in writing in a form acceptable to the Corporation.
In the absence of any such designation, such unpaid amounts
shall be paid to the Executive's surviving spouse, or if the
Executive should die without a spouse surviving, to the
Executive's estate.
ARTICLE VI - CLAIMS PROCEDURE
6.1 Filing Claims
Any insured, beneficiary or other individual (hereinafter,
"Claimant") entitled to benefits under the Agreement shall
file a claim request with the Administrator.
6.2 Notification of Claimant
If a claim request is wholly or partially denied, the
Administrator will furnish to the Claimant a notice of the
decision within 90 days in writing and in a manner
calculated to be understood by the Claimant, which notice
will contain the following information:
(a) The specific reason or reasons for the denial;
(b) Specific reference to pertinent provisions of the
Agreement upon which the denial is based;
(c) A description of any additional material or
information necessary for the Claimant to perfect
the Claim and an explanation of why such material
or information is necessary; and
(d) An explanation of the claims review procedure
under the Agreement describing the steps to be
taken by a Claimant who wishes to submit his claim
for review.
6.3 Review Procedure
Claimant or his authorized representative may with respect
to any denied claims:
(a) Request a review upon written application filed
within sixty (60) days after receipt by the
Claimant of written notice of the denial of his
claim;
(b) Review pertinent documents; and
(c) Submit issues and comments in writing.
Any request or submission must be in writing and directed to
the Fiduciary (or its designee). The Fiduciary (or its
designee) will have the sole responsibility for the review
of any denied claim and will take all steps appropriate in
the light of its findings.
6.4 Decision on Review
(a) The Fiduciary (or its designee) will render a decision
following its review. If special circumstances (such
as the need to hold a hearing on any matter pertaining
to the denied claim) warrant additional time, the
decision will be rendered as soon as possible, but not
later than 120 days after receipt of the request for
review. Written notice of any such extension will be
furnished to the Claimant prior to the commencement of
the extension.
(b) The decision on review will be in writing and will
include specific reasons for the decision, written in a
manner calculated to be understood by the Claimant, as
well as specific references to the pertinent provisions
of the Agreement on which the decision is based.
(c) If the decision on the review is not furnished to the
Claimant within the time limits prescribed above, the
claim will be deemed denied on review.
ARTICLE VII - MISCELLANEOUS PROVISIONS
7.1 Misrepresentation
(a) The Corporation may deem it appropriate to insure its
obligation to provide all or any part of the benefits
described in this Agreement. The Corporation may wish
to make any insurance used to insure its obligation
effective as of the date the Executive becomes entitled
to the benefit insured with such insurance. If the
Corporation does deem it appropriate to insure all or
any part of any such benefits, the Corporation will so
notify the Executive. The Executive agrees to take
whatever actions may be necessary to enable the
Corporation to timely apply for, acquire and maintain
such insurance and to fulfill the requirements of the
insurance company relative to the issuance thereof.
(b) If the Executive is required by the Corporation to
submit information to one or more insurers in order to
secure insurance as described herein, and if the
Executive has made a material misrepresentation in any
application for such insurance, the Executive's right
to a benefit under this Agreement will be reduced by
the amount of the benefit that is not paid by the
insurer(s) because of such material misrepresentation.
7.2 Suicide
No benefit will be payable under this Agreement if the
Executive dies by suicide within two years after the
effective date of this Agreement or of any policy secured
pursuant to Section 7.1. No increase in the amount of any
benefit provided in this Agreement will be payable under
this Agreement if the Executive dies by suicide within two
years of the effective date of such increase or any policy
secured by the Corporation to insure its obligation for such
increase.
7.3 Satisfaction of Claims
The Executive agrees that his rights and interests, and
rights and interests of any persons taking under or through
him, will be completely satisfied upon compliance by the
Corporation with the provisions of this Agreement.
7.4 Amendment
The Agreement may be altered, amended, or modified only by a
written instrument signed by the Corporation and the
Executive. This Agreement sets forth the entire
understanding of the parties with respect to the subject
matter thereof.
7.5 Governing Law
This Agreement will be governed by the laws of the State of
Connecticut.
7.6 Non-Assignable Rights
Neither the Executive nor his spouse, nor other beneficiary,
will have any right to commute, sell, assign, transfer or
otherwise convey the right to receive any payments hereunder
without the written consent of the Corporation. Such
payments and the right thereto are expressly declared to be
non-assignable and nontransferable.
7.7 Independence of Agreement
The benefits under this Agreement will be independent of,
and in addition to, any other agreement that may exist from
time to time between the parties hereto, or any other
compensation payable by the Corporation to the Executive,
whether as salary, bonus or otherwise. This Agreement will
not be deemed to constitute a contract of employment between
the parties hereto, nor will any provision hereof restrict
the right of the Corporation to discharge the Executive, or
restrict the right of the Executive to terminate his
employment.
7.8 Non-Secured Promise
The rights of the Executive under this Agreement and of any
beneficiary of the Executive will be solely those of an
unsecured creditor of the Corporation. Any insurance policy
or any other asset acquired or held by the Corporation in
connection with the liabilities assumed by it hereunder,
will not be deemed to be held under any trust for the
benefit of the Executive or his beneficiaries or to be
security for the performance of the obligations of the
Corporation, but will be, and remain, a general, unpledged,
unrestricted asset of the Corporation and the Corporation
will retain all ownership rights in any such policy.
7.9 Change of Business Forms
The Corporation agrees that it will not merge with, or
permit its business activities to be taken over by, any
other corporation or organization, unless and until the
succeeding or continuing corporation or other organization
agrees to assume the rights and obligations of the
Corporation herein set forth. The Corporation further
agrees that it will not cease its business activities or
terminate its existence, other than as heretofore set forth
in this Article VII, without having made adequate provisions
for the fulfilling of its obligations hereunder.
7.10 Fiduciary and Administrator
(a) The Corporation will be Fiduciary and Administrator of
this Agreement. The Corporation's Board of Directors
may authorize a person or group of persons to fulfill
the responsibilities of the Corporation as
Administrator.
(b) The Fiduciary or the Administrator may employ others to
render advice with regard to its responsibilities under
this Agreement. The Fiduciary may also allocate
fiduciary responsibilities to others and may exercise
any other powers necessary for the discharge of its
duties to the extent not in conflict with any
provisions of the Employee Retirement Income Security
Act of 1974 that may be applicable.
7.11 Waiver by Human Resources Committee
The Human Resources Committee of the Board is authorized to
waive any provisions of this Agreement which would otherwise
operate to deny, reduce or delay any benefit payments under
any provisions of this Agreement.
IN WITNESS WHEREOF, the parties have hereunto set their
hands and seals, the Corporation by its duly authorized
officer, on the day and year first written above.
/s/ William A. Kerr
Executive
THE HARTFORD STEAM BOILER
INSPECTION AND INSURANCE
COMPANY
/s/ Gordon W. Kreh
Its: President
APPENDIX A
ATTAINED AGE
AT TERMINATION OF
EMPLOYMENT PERCENTAGE OF
BENEFIT
65 100
64 97
63 94
62 91
61 88
60 85
59 82
58 79
57 76
56 73
55 70
APPENDIX B
YEARS OF SERVICE
AT TERMINATION OF
EMPLOYMENT PERCENTAGE OF
BENEFIT
5 100
4 80
3 60
2 40
1 20
Less than 1 0