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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
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/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
The Hartford Steam Boiler Inspection and Insurance Company
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(Name of Registrant as Specified in Its Charter)
The Hartford Steam Boiler Inspection and Insurance Company
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
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(4) Proposed maximum aggregate value of transaction:
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/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registrations statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(4) Date filed:
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1 Set forth the amount on which the filing fee is calculated and state how it
was determined.
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[LOGO]
NOTICE OF ANNUAL MEETING
March 1, 1994
TO THE STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of Stockholders of The
Hartford Steam Boiler Inspection and Insurance Company will be held on Tuesday,
April 19, 1994, at 2:00 o'clock P.M., at the office of the Company, One State
Street, Hartford, Connecticut, for the following purposes:
1. To elect four directors for three-year terms;
2. To appoint independent public accountants for the ensuing year; and
3. To transact any other business proper to come before the meeting.
A proxy statement to assist you in the consideration of the foregoing
matters is attached.
The Board of Directors has fixed February 8, 1994, at 4:00 o'clock P.M., as
the record date and time for the determination of the stockholders entitled to
notice of and to vote at said Annual Meeting and any adjournment thereof.
It is hoped that you will be able to attend this meeting. If you cannot,
you are urgently requested to sign and return the enclosed proxy card in the
envelope provided.
By order of the Board of Directors.
R. K. PRICE
Corporate Secretary
The Hartford Steam Boiler
Inspection and Insurance Co.
One State Street
Hartford, Connecticut 06102
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PROXY STATEMENT
GENERAL
The enclosed proxy is solicited by the Board of Directors of The Hartford
Steam Boiler Inspection and Insurance Company for use at the Annual Meeting of
Stockholders to be held April 19, 1994, and at any and all adjournments thereof.
The Company is a Connecticut corporation and its principal office is located at
One State Street, Hartford, Connecticut 06102, (203) 722-1866.
You are urged to read this proxy statement and to fill in, date, sign and
return the enclosed form of proxy. The giving of a proxy does not affect your
right to vote should you attend the meeting, and the proxy may be revoked at any
time before it is voted. Properly executed proxies not revoked will be voted as
specified.
Arrangements will be made with brokers, nominees and fiduciaries to
distribute proxy material to their principals, and their postage and clerical
expenses in so doing will be paid by the Company. The entire cost of soliciting
proxies on behalf of management will be borne by the Company. Directors,
officers and regular employees of the Company may solicit proxies personally if
proxies are not received promptly. The Company has retained Corporate Investor
Communications, Inc. ("CIC") to aid in the solicitation of proxies. CIC's fee is
not expected to exceed $3,250 in addition to out-of-pocket expenditures.
Only holders of common stock of record at the close of business on February
8, 1994 are entitled to notice of, and to vote at, the meeting. Each stockholder
of record on said date is first being mailed the Annual Report of the Company
for the fiscal year ended December 31, 1993 with the Notice, Proxy Statement and
Proxy card on or about March 1, 1994. On February 8, 1994, there were 20,535,064
outstanding shares of common stock, each entitled to one vote.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Charter provides for a Board of not less than nine nor more
than fourteen directors, the exact number of directorships to be determined from
time to time by resolution adopted by the affirmative vote of a majority of the
Board. The directors are divided into three classes consisting, as nearly as
possible, of one third of the total number of directors constituting the entire
Board. Each class is elected for a three-year term at successive annual
meetings. The Board of Directors has fixed the number of directorships at
twelve.
Four directors are to be elected for terms of three years and until their
successors are elected and qualified. Unless otherwise instructed, the shares
represented by the enclosed proxy will be voted for Donald M. Carlton, William
B. Ellis, E. James Ferland and Wilson Wilde. In the event any nominee is unable
to serve as a director on the date of the Annual
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Meeting, the proxies may be voted for a substitute nominee recommended by the
Board of Directors. The affirmative vote of a majority of the votes represented
is required for election of each director. Abstentions and broker non-votes are
included in the total number of shares represented but are not counted as either
affirmative or negative votes.
The nominees for election to the Board of Directors were elected to their
present term at the 1991 Annual Meeting.
Stated below are the names and ages of the nominees and directors
continuing in office, the principal occupation of each during at least the last
five years, the date on which each individual was first elected as a director of
the Company, and other directorships and business and civic affiliations of such
persons. The information set forth on the following pages with respect to each
nominee's and director's principal occupation, other directorships and
affiliations and beneficial ownership of Company common stock has been furnished
by the nominee or director.
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
FOR THREE-YEAR TERM EXPIRING IN 1997
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PHOTO Donald M. Carlton
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Dr. Carlton, 56, is an Executive Vice President and a director
of the Company and President, Chairman of the Board and a
director of Radian Corporation, the Company's wholly-owned
subsidiary specializing in
environmental, energy, mechanical and materials technology
services. He and several associates founded Radian Corporation
in 1969, and he has served as its President since that time.
Dr. Carlton is a director of Medical Polymers Technologies,
Inc., Joy Technologies, Inc., American Capital
Bond Fund, Inc. and American Capital Convertible Securities,
Inc. He is a trustee of American Capital Income Trust.
Dr. Carlton has served as a director of the Company since July
1975.
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PHOTO William B. Ellis
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Mr. Ellis, 53, is Chairman of the Board of Northeast Utilities,
and Chairman and a director of its principal subsidiaries and
of Connecticut Yankee Atomic Power Company. He had also served
as Chief Executive
Officer of these companies from 1987 to 1993. Mr. Ellis is
Chairman and a director of Connecticut Capitol Region Growth
Council, Inc. and a director of Nuclear Electric Insurance
Limited, Connecticut Mutual Life Insurance Company, Edison
Electric Institute and The Greater Hartford
Chamber of Commerce. He is also a member of the Board of the
Smithsonian Museum of Natural History and a member of the
Conservancy Science Advisory Board of the Nature Conservancy.
Mr. Ellis has served as a director of the Company since April
1991.
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PHOTO E. James Ferland
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Mr. Ferland, 51, is Chairman, President and Chief Executive
Officer of Public Service Enterprise Group Incorporated and
Chairman and Chief Executive Officer of its principal
subsidiary, Public Service Electric and
Gas Company. He joined Public Service Enterprise Group
Incorporated as President and Chief Operating Officer on June
1, 1986 and assumed his present position with the company one
month later. Mr. Ferland is a director of First Fidelity
Bancorporation, First Fidelity Bank, N.A., N.J.,
Foster Wheeler Corporation, the Electric Power Research
Institute, the New Jersey Utilities Association, the Edison
Electric Institute and Public Affairs Research Institute of New
Jersey. He is Chairman of the Institute of Nuclear Power
Operations (INPO) and Chairman of the New Jersey State Chamber
of Commerce.
Mr. Ferland has served as a director of the Company since
November 1986.
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PHOTO Wilson Wilde
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Mr. Wilde, 66, is Chairman, Chief Executive Officer and a
director of the Company. He joined the Company in 1953 as an
investment analyst. He became an officer of the Company in 1964
and was elected Vice President
and a director in 1967. Mr. Wilde was elected Executive Vice
President in 1970 and elected President in 1971. He assumed his
present position in September of 1993. Mr. Wilde is a director
of GenRad, Inc., Shawmut National Corporation, Phoenix Home
Life Mutual Insurance Company,
Phoenix Reinsurance Company and Phoenix Re Corporation. He is
also a director of Radian Corporation and The Boiler Inspection
and Insurance Company of Canada, affiliates of the Company. In
addition, he is a director of the American Insurance
Association and the Insurance Association of Connecticut, and
is Chairman of the Board of Trustees of The Loomis Chaffee
School.
Mr. Wilde has served as a director of the Company since March
1967.
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MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING IN 1995
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PHOTO Colin G. Campbell
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Mr. Campbell, 58, is President of Rockefeller Brothers Fund.
Prior to joining Rockefeller Brothers Fund in 1988, Mr.
Campbell served as President of Wesleyan University from 1970
to 1988. Mr. Campbell is a
director of Pitney Bowes, SYSCO Corporation, the Charles E.
Culpeper Foundation, and the University of Cape Town Fund, and
Chairman of the Board of Winrock International Institute for
Agricultural Development.
He is a trustee of the Colonial Williamsburg Foundation and
Pomona College, and Chairman of the Board of Trustees of the
Institute for the Future.
Mr. Campbell has served as a director of the Company since
September 1983.
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PHOTO John A. Powers
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Mr. Powers, 67, is Chairman Emeritus of Heublein Inc. (a
subsidiary of Grand Metropolitan PLC), a producer and marketer
of alcoholic beverage products. He had served as Chairman of
the Board of Heublein from 1986
until his retirement in 1992. Mr. Powers is a director of
Connecticut Business and Industry Association and The Advest
Group, Inc. He is a trustee of The Hartford Graduate Center.
Mr. Powers has served as a director of the Company since
September 1986.
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PHOTO Paul A. Vatter
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Dr. Vatter, 69, is a professor of business administration at
Harvard University Graduate School of Business Administration.
He joined the staff at Harvard as an assistant dean in 1958,
becoming an associate
professor in 1962 and a professor in 1970. Dr. Vatter is a
director of Sbarro, Inc.
Dr. Vatter has served as a director of the Company since April
1975.
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PHOTO John M. Washburn, Jr.
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Mr. Washburn, 66, is President and a director of The Merrow
Machine Company, a manufacturer of industrial sewing machines.
He joined Merrow in 1953 and became Secretary in 1960 and
Treasurer in 1963. He
has served in his present position since 1978. Mr. Washburn is
a director of Walton Company and a trustee of the YMCA of
Greater Hartford.
Mr. Washburn has served as a director of the Company since
March 1973.
TERM EXPIRING IN 1996
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PHOTO Joel B. Alvord
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Mr. Alvord, 55, is Chairman, Chief Executive Officer and a
director of Shawmut National Corporation. He joined the
Hartford National Bank and Trust Company in 1963 and served in
a variety of positions before
becoming President of both Hartford National Bank and Hartford
National Corporation and a director of the corporation in 1978.
He was named to his present position in 1988 following the
merger of Hartford National Corporation with Shawmut
Corporation. Mr. Alvord is a director
of The Institute of Living and Jobs for Massachusetts, a
trustee of the Wadsworth Atheneum and The Wang Center for the
Performing Arts, Boston, and a member of the Massachusetts
Business Roundtable, The Bankers Roundtable and the Corporate
Advisory Committee of the Museum of Fine Arts, Boston.
Mr. Alvord has served as a director of the Company since
December 1971.
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PHOTO Richard G. Dooley
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Mr. Dooley, 64, is a consultant to Massachusetts Mutual Life
Insurance Company. Mr. Dooley joined Massachusetts Mutual in
1955 and served in a variety of positions before being named
Executive Vice President and
Chief Investment Officer in 1978, a position he held until his
retirement in 1993. Mr. Dooley is a director of Advest Group,
Inc., Jefferies Group, Inc., and Kimco Realty Corp. He is a
trustee of Saint Anselm College.
Mr. Dooley has served as a director of the Company since May
1984.
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PHOTO Lois Dickson Rice
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Mrs. Rice, 61, is a Guest Scholar, Program in Economic Studies,
at the Brookings Institution, a position she has held since
October 1991. From 1981 until 1991, she served as Senior Vice
President, Government Affairs
and a director of Control Data Corporation. Mrs. Rice is a
director of Bell Atlantic-Washington, D.C., Inc., McGraw-Hill
Inc., International Multifoods, Shawmut National Corporation
and UNUM Corp. She is a trustee of The Urban Institute, The
German Marshall Fund, and George Washington
University. Mrs. Rice also serves as a member of the Board
of Overseers of the Tuck School of Management, Dartmouth
College, and the President's Foreign Intelligence Advisory
Board.
Mrs. Rice has served as a director of the Company since April
1990.
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PHOTO Gordon W. Kreh
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Mr. Kreh, 46, is President and a director of the Company. He
joined The Boiler Inspection and Insurance Company of Canada, a
subsidiary of the Company, in 1971, before moving to the
Company's home office in 1975.
He became an officer of the Company in 1980 and was elected
Vice President in 1984, while serving in a variety of positions
and departments within the Company. In 1988, he was named
Senior Vice President
of Engineering Insurance Group, a partnership between the
Company and General Reinsurance Corporation, and became its
President in 1989. He was elected Senior Vice President of the
Company in 1992. He assumed his present position in September
of 1993. Mr. Kreh is a director of Radian Corporation and The
Boiler Inspection and Insurance Company of Canada.
Mr. Kreh has served as a director of the Company since
September 1993.
MEETINGS AND REMUNERATION OF THE DIRECTORS
During 1993, the Board of Directors held eleven meetings and twenty-one
committee meetings. Each director attended at least 75% of the meetings of the
Board and committees on which he or she served combined.
The annual retainer for each director who is neither an employee of the
Company nor of a subsidiary is $20,000. Under the 1989 Restricted Stock Plan for
Non-Employee Directors, approved by stockholders at their 1989 Annual Meeting,
one-half of the annual retainer is paid in restricted stock of the Company and
one-half is paid in cash. The restricted stock is forfeitable until such time as
the director retires, dies, becomes disabled, resigns with the consent of a
majority of the other directors or upon a change in control of
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the Company, whichever event occurs earliest. Each non-employee director also is
paid a fee of $1,200 for attendance at a Board or a committee meeting and an
additional $350 for each committee meeting chaired. Directors who are also
employees of the Company or a subsidiary do not receive such compensation for
service on the Board or committees thereof and are not eligible for awards of
restricted stock under the 1989 Restricted Stock Plan for Non-Employee
Directors. Non-employee directors are not eligible to participate in any of the
plans discussed in the Board Compensation Committee Report on Executive
Compensation. Directors may be reimbursed for reasonable travel expenses
incurred in attending Board and committee meetings.
In addition, the Company has established a Retirement Plan for non-employee
directors. A director who retires after ten years of service on the Board is
entitled to receive an annual retirement benefit equal to the annual retainer
paid to such director immediately prior to retirement. (A director who has
served on the Board for at least one year but less than ten years receives a
prorated amount.) The retirement benefits may be adjusted periodically and are
payable for life. In the event of a director's death while serving as a member
of the Board, his or her spouse is entitled to receive an annual death benefit
equal to 50% of the annual retainer in effect at the time of such director's
death. During 1993, a total of $109,000 was paid to former directors under the
plan. The Company has established a trust fund pursuant to which the retirement
benefits will be paid.
In 1992, as part of the Company's policy of providing support for
charitable institutions and in order to retain and attract qualified directors,
the Board of Directors established a Charitable Endowment Program for members of
the Board of Directors who have at least one year of service as a director. The
program is currently funded by life insurance on the lives of eligible
directors. The Company intends to make charitable contributions of $1 million
per director, paid out over a period of ten years following the death of the
director. Each director is able to recommend up to three charities to receive
contributions from the Company. Beneficiary organizations designated under this
program must be tax-exempt, and donations ultimately paid by the Company will be
deductible against federal and other income taxes payable by the Company in
accordance with the tax laws applicable at the time. Directors derive no
financial benefit from the program since all insurance proceeds and charitable
deductions accrue solely to the Company. Because of such deductions and use of
insurance, the long-term cost to the Company is expected to be low.
During 1993, Dr. Vatter was retained by the Company to perform consultation
services in the area of management development programs. Dr. Vatter received
$30,000 for these services.
The Company's Board of Directors annually appoints certain directors to
serve on standing committees of the Board of Directors, among which are the
Audit and Compensation Committees.
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The Audit Committee's primary responsibility is to review and report to the
Board on the Company's accounting policies, the adequacy of its financial and
internal auditing controls, and the reliability of financial information
reported to the public. The Committee has the authority to approve the scope of
the annual audit and to authorize the release of annual financial statements.
The Audit Committee held four meetings during 1993. Dr. Vatter (Chairman), Mr.
Campbell, Mr. Dooley and Mrs. Rice, none of whom is an employee of the Company
or a subsidiary, presently serve on the Audit Committee.
The Compensation Committee's primary function is to recommend and approve
remuneration for the Company's officers and directors and to recommend changes
to the Company's benefit plans, as described in the Board Compensation Committee
Report on Executive Compensation located on page 10. The Committee also acts as
Plan Administrator for the 1985 Stock Option Plan, the 1989 Restricted Stock
Plan for Non-Employee Directors, the Directors' Retirement Plan and the
Long-Term and Short-Term Incentive Plans. The Compensation Committee held five
meetings during 1993. Mr. Alvord (Chairman), Mr. Campbell, Mr. Powers and Mr.
Ferland, none of whom is an employee of the Company or a subsidiary, presently
serve on the Compensation Committee. (Dr. Vatter served on the Committee during
1993 until November, 1993 when he was replaced by Mr. Ferland.)
Other committees of the Board of Directors are the Development Committee,
the Executive Committee, the Employee Development Committee, the Finance
Committee and the Technology Committee.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The Company is unaware of any stockholder who on February 1, 1994 was the
beneficial owner of 5 percent or more of the Company's outstanding common stock,
except as noted in the following table.
NAME OF BENEFICIAL OWNER AMOUNT OF SHARES PERCENT OF CLASS
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The Hartford Steam Boiler 1,090,269(1) 5.31%
Inspection and Insurance Company
Leveraged Employee Stock Ownership Trust
c/o Shawmut Bank Connecticut
777 Main Street
Hartford, Connecticut 06115
Cooke & Bieler, Inc. 1,572,050(2) 7.65%
1700 Market Street
Philadelphia, Pennsylvania 19103
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(1) Shares held by the trust are voted in accordance with the instructions of
participants.
(2) Information provided as of 12/31/93 by Cooke & Bieler, Inc. indicates that
Cooke & Bieler, Inc. has sole voting power with respect to 1,266,400 shares
and sole dispositive power with respect to 1,478,550 shares.
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The number of shares of Company common stock beneficially owned as of
February 1, 1994 by each nominee and director continuing in office, by each
executive officer named in the Summary Compensation Table, which in each case
represents less than 1% of the common stock outstanding as of such date, and by
all directors and executive officers as a group, is shown in the table below.
Unless otherwise indicated, each officer, nominee and director has sole voting
and investment power (or shares such powers with a family member) with respect
to common stock shown as held directly. All shares shown as held indirectly
reflect sole voting and investment power exercised by the individual specified
unless otherwise indicated.
DIRECTLY INDIRECTLY
BENEFICIAL OWNER HELD HELD TOTAL
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Joel B. Alvord..................................... 911 911
Colin G. Campbell.................................. 1,619 2,400(1) 4,019
Donald M. Carlton.................................. 74,269(2) 74,269
Richard G. Dooley.................................. 6,828 6,828
William B. Ellis................................... 575 575
E. James Ferland................................... 1,819 2,000(3) 3,819
Kenneth J. Kelly................................... 54,539(4) 54,539
Gordon W. Kreh..................................... 21,245(5) 700(6) 21,945
John A. Powers..................................... 2,369 2,369
Lois Dickson Rice.................................. 825 200(7) 1,025
Paul A. Vatter..................................... 10,499 100(8) 10,599
John M. Washburn, Jr............................... 11,019 2,000(9) 13,019
Wilson Wilde....................................... 143,250(10) 17,790(11) 161,040
Donald K. Wilson, Jr............................... 75,653(12) 75,653
All Directors and Executive Officers as
a Group (18 in number)........................... 612,373(13)
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(1) 800 shares held in trusts for benefit of children and 1,600 shares held as
trustee of trusts for benefit of nieces and nephews, over which Mr.
Campbell exercises shared voting and investment power.
(2) Includes 39,700 shares subject to options to purchase shares of Company
common stock which are exercisable on or before April 1, 1994.
(3) Shares held by spouse.
(4) Includes 31,200 shares subject to options to purchase shares of Company
common stock which are exercisable on or before April 1, 1994.
(5) Includes 11,000 shares subject to options to purchase shares of Company
common stock which are exercisable on or before April 1, 1994.
(6) 300 shares held by spouse, 200 shares held by daughter and 200 shares held
by son.
(7) Shares held as executrix of spouse's estate.
(8) Shares held by daughter.
(9) Shares held by spouse.
(10) Includes 90,400 shares subject to options to purchase shares of Company
common stock which are exercisable on or before April 1, 1994.
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(11) 160 shares held by spouse. 17,630 shares held in a charitable foundation,
over which Mr. and Mrs. Wilde exercise shared voting and investment power.
(12) Includes 45,800 shares subject to options to purchase shares of Company
common stock which are exercisable on or before April 1, 1994.
(13) Includes 304,400 shares subject to options to purchase shares of Company
common stock which are exercisable on or before April 1, 1994. Assuming the
exercise of all such options, the percentage of common stock owned by
directors and executive officers as a group would be 2.82% of the common
stock outstanding.
REPORTING OF SECURITIES TRANSACTIONS
Ownership of and transactions in Company stock by executive officers and
directors of the Company are required to be reported to the Securities and
Exchange Commission pursuant to Section 16(a) of the Securities Exchange Act of
1934. During the fiscal year ended December 31, 1993, Paul A. Vatter, Director,
inadvertently filed one Form 3 late to report shares held for his benefit in a
Keogh Plan trust. Dr. Vatter has always correctly reported these shares as part
of his own holdings, and when he became aware that a separate filing was
required on behalf of the trust itself, he immediately made that filing.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Executive compensation programs are administered by the Compensation
Committee of the Board of Directors (the "Committee"). A nationally recognized
compensation consultant also reviews and analyzes the Company's executive
compensation policies and practices in order to advise the Committee as more
fully described below. The Committee believes that the structure of the
Company's compensation programs provides a direct link between Company
performance and executive compensation.
Under the direction of the Committee, executive compensation programs are
structured so that they are competitive with peer companies in order to motivate
and retain key individuals and to provide incentives to achieve the Company's
short and long-term goals. The peer companies used for this analysis are not
identical to those included in the S&P 500 Property/Casualty Insurance Index
used in the Performance Graph located on page 20 because they are selected for
the purpose of determining whether the Company's executive compensation programs
are competitive in terms of recruiting and retaining key executives. For 1993,
this compensation assessment peer group was composed of seventeen leading
property/casualty insurance and engineering services companies, selected based
on their size and specific lines of business. Base salary and variable
compensation paid to executives under the Company's incentive plans (Short-Term
and Long-Term Incentive Plans and the 1985 Stock Option Plan) in 1993 were below
the median range of that paid to executives by the companies in this
compensation assessment peer group according to information compiled by the
Company's compensation consultant.
Each executive's annual performance review serves as the basis for making
adjustments to base salary. Individual performance and business unit performance
rated with
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reference to several qualitative factors, such as achievement of annual goals
and objectives, are both considered. After annual adjustments have been
proposed, the compensation consulting firm compares the executives' base
salaries to those of executives with similar responsibilities in the Company's
compensation assessment peer group. Annual salary adjustments for executives are
recommended by the Chief Executive Officer and approved by the Compensation
Committee. The Committee determines adjustments for the Chief Executive Officer
based on a review of a number of factors, including (listed in order of
importance from highest to lowest) earnings per share, return on investment,
capital utilization, quality of management and employees, innovation within the
organization and quality of the Company's strategic plan. Based on a review of
such factors, Mr. Wilde received no salary increase in 1993.
Executives (other than Dr. Carlton) are eligible for awards made under the
Company's Short-Term Incentive Plan, which provides for the annual award of
bonuses to key employees (presently limited to the officer group of the Company)
at the end of the fiscal year provided certain performance measures are
achieved. Under a specified schedule defined by the plan, the Committee
establishes a pool of incentive award dollars based on the actual percentage of
Annual Budgeted Net Income Per Share (cited in the Business Plan of the Company)
achieved for the year and the performance of the Company as compared to a group
of peer companies. (The Short-Term Incentive Plan's peer group is not identical
to the six companies included in the S&P 500 Property/Casualty Insurance Index
used in the Performance Graph located on page 20 because, under the terms of the
Plan, the Committee selects a broader group of companies, including leading
property/casualty insurance and engineering services companies which are
selected on the basis of similarity to the Company's business lines.) In
evaluating such performance, the Committee considers such factors as (listed in
order of importance, from highest to lowest): growth in earnings per share,
revenue growth, return on equity for the Company, the combined ratio for the
Company, and the total return on the Company's common stock over the last year.
Once the pool is established, individual awards are then determined by the
President, and are based on the participant's contributions to the Company
during the plan year. The awards can range from 0 to 60% of the participant's
base salary. The Committee determines the award for the Chief Executive Officer
and the President, and has final approval of all awards made under the plan.
Executive officers are eligible for awards under both the Short-Term Incentive
Plan and Long-Term Incentive Plan (described below) and the total award under
the two plans is limited to an aggregate award of 100% of the participant's base
salary. No bonuses were payable under the formula for the Short-Term Incentive
Plan for 1993 for any participants under the Plan.
Long-term incentives are provided to executives through awards made under
the Company's Long-Term Incentive Plan. (Currently, only executive officers of
the Company, other than Dr. Carlton, are eligible for awards under the plan.)
The Long-Term Incentive Plan provides for the yearly grant of bonus awards based
upon the Company's achievement of specified performance objectives (Performance
Measures) established by the Committee at the beginning of each rolling
three-year Performance Period. For the
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Performance Period that ended on December 31, 1993, the Performance Measures
were earnings per share, expense ratio and return on equity. The incentive award
payable at the end of each three-year Performance Period is the sum of the award
percentages payable for each Performance Measure multiplied by the participant's
base salary rate in effect for the year the award is being determined. If all of
the Performance Measures are met for a specific Performance Period, the award
percentage is 25%. If actual performance exceeds the Performance Measures, the
award percentage will be increased, up to a maximum of 40%. With the approval of
the non-employee members of the Board of Directors, the Committee may modify the
award schedule should unusual circumstances warrant a change. The award
percentage for the Chief Executive Officer is one and one-half times the award
percentage for all other participants.
The Committee awarded a $58,125 bonus to Mr. Wilde under the Long-Term
Incentive Plan for the performance period ending in 1993 based on the Company's
exceeding performance objectives set for the insurance expense ratio for the
three-year period.
Executive officers are eligible for annual awards of stock options and
restricted stock under the Company's 1985 Stock Option Plan. Awards made under
the plan provide executives with long-term incentives and align executives'
long-term interests with those of stockholders. Stock options are awarded based
upon the market price of the Company's common stock on the date of the grant and
are linked to future performance of the Company's stock because they do not
become valuable to the participant unless the price of Company common stock
increases above the grant price. Restricted stock awards increase executive
stock ownership and are also tied to long-term performance of the Company
because the shares cannot be sold or transferred until the restricted period
lapses and will be forfeited if the individual leaves the Company (for reasons
other than retirement, death or disability) during the restricted period.
The total pool of shares to be awarded to participants in principal
business units of the Company is based on such units' relative contributions to
Company performance for the most recent fiscal year. Awards to be made to
specific participants are based on individual performance. The Company's outside
compensation consultant reviews each executive's award in comparison to awards
made to individuals employed by companies in the compensation assessment peer
group described above and makes recommendations as to whether the awards made to
Company executives should be adjusted.
Mr. Wilde was granted restricted stock and stock options in April of 1993
based on the following factors, which were weighted equally: Company performance
regarding earnings per share, revenue growth, return on equity, total return on
Company common stock for the one, three, five and ten-year periods ending
December 31, 1992, and accomplishment of Strategic Objectives established by the
Board of Directors.
Donald M. Carlton, Executive Vice President and a director of the Company,
is also President, Chairman of the Board and a director of Radian Corporation, a
subsidiary of the Company. As a Radian Corporation executive, Dr. Carlton's base
salary, annual and long-
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term bonuses are determined by the Compensation Committee of the Board of
Directors of Radian Corporation. The calculation of adjustments to Dr. Carlton's
base salary, and annual and long-term bonus awards are made in the same manner
as described above for other executives of the Company but using performance
measures established for Radian Corporation by the Compensation Committee of the
Board of Directors of Radian Corporation rather than of the Company. Any such
adjustments or awards are then subject to final approval of the Compensation
Committee of the Company's Board of Directors.
The Company's outside compensation consultant also conducts an annual
review of each executive's compensation package in its entirety in comparison
with the total compensation package for executives in the Company's compensation
assessment peer group and makes recommendations to the Committee as to any
appropriate adjustments that should be made.
Effective for fiscal years beginning on or after January 1, 1994, publicly
held corporations may not deduct certain types of compensation paid to the Chief
Executive Officer and the next four most highly compensated individuals to the
extent such compensation exceeds $1 million. Certain types of compensation are
excluded from this limitation, including performance-based compensation paid
under plans that are approved by stockholders and administered by outside
directors. Based on the current provisions of this new law and the structure of
the Company's executive compensation plans, the Company believes that all
compensation paid to executives during 1994 will be fully deductible. The
Committee expects to review the executive compensation programs during 1994 to
determine whether future changes are warranted.
Respectfully submitted by:
Joel B. Alvord, Chairman
Colin G. Campbell
E. James Ferland
John A. Powers
The Compensation Committee of the Board of Directors of the Company.
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SUMMARY COMPENSATION TABLE
The following table sets forth cash compensation for the five most highly
compensated executive officers of the Company for services rendered in all
capacities to the Company and its subsidiaries during the last three fiscal
years.
LONG-TERM COMPENSATION
------------------------------------
ANNUAL COMPENSATION AWARDS SECURITIES
--------------------------------- ----------- UNDERLYING PAYOUTS
OTHER RESTRICTED OPTIONS ----------
ANNUAL STOCK (NUMBER LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS COMPENSATION AWARD(S)(2) OF SHARES) PAYOUTS(3) COMPENSATION(4)
- ---------------------------- ---- -------- -------- ------------ ----------- ----------- ---------- ---------------
Wilson Wilde, Chairman 1993 $500,000 0 0 $ 143,125 43,000 $ 58,125 $36,180
and Chief Executive 1992 $510,577 $100,000 0 $ 256,250 38,000 $133,900 $36,016
Officer 1991 $466,346 $213,750 0 $ 483,175 22,300 $164,875 $17,891
Gordon W. Kreh, 1993 $246,731 0 0 $ 45,800 59,000 $ 15,069 $ 6,416
President(5) 1992 $196,475 $ 28,000 0 $ 63,816 11,000 $ 7,933 $ 3,027
Donald M. Carlton, 1993 $384,384 (3) $ 29,369(6) $ 45,800 23,700 (3) $28,115
Executive Vice President(5) 1992 $384,123 0 0 $ 102,500 17,700 $100,068 $29,019
Donald K. Wilson, Jr., 1993 $331,923 0 0 $ 45,800 16,000 $ 25,963 $10,266
Executive Vice President 1992 $334,038 $ 24,000 0 $ 102,500 17,700 $ 58,013 $10,133
1991 $308,077 $ 78,750 $ 4,298(6) $ 232,175 10,700 $ 72,891 $13,553
Kenneth J. Kelly, Senior 1993 $251,923 0 0 $ 45,800 12,500 $ 19,763 $10,016
Vice President and 1992 $249,231 $ 28,000 0 $ 84,563 14,500 $ 43,733 $ 9,885
General Counsel 1991 $225,154 $ 92,000 $ 32,481(6) $ 175,700 7,800 $ 53,222 $13,331
- ------------------------------
(1) All employees of the Company (other than Dr. Carlton) received one
additional paycheck in 1992 of their regularly scheduled bi-weekly salary
amount due to the fact that there were twenty-seven pay periods in 1992
rather than the usual twenty-six. These amounts are reflected in the 1992
figures shown here.
(2) The value of restricted stock shown in this column is calculated by
multiplying the closing price of Company common stock on the date the
restricted shares were granted by the number of shares awarded. Recipients
are entitled to receive dividends on restricted stock to the extent paid on
the Company's common stock generally. The total number of restricted shares
held by each of the named executive officers, and the aggregate value of
such shares, calculated by multiplying the closing price of Company common
stock as of 12/31/93 by the number of shares held on such date, is as
follows: Mr. Wilde: 15,200 shares, $676,400 aggregate value; Mr. Kreh: 2,000
shares, $89,000 aggregate value; Dr. Carlton: 5,800 shares, $258,100
aggregate value; Mr. Wilson: 6,500 shares, $289,250 aggregate value; and Mr.
Kelly: 5,250 shares, $233,625 aggregate value.
(3) The LTIP payouts column shows awards made under the Company's Long-Term
Incentive Plan for all executives other than Dr. Carlton. Annual and
long-term bonus awards for Dr. Carlton for 1993 were not calculated as of
2/1/94 and will be disclosed in the 1995 Proxy Statement, in accordance with
Securities and Exchange Commission rules. More detailed information on
calculation of such awards is located in the Board Compensation Committee
Report on Executive Compensation located on page 10.
(4) The values listed in this column include the following amounts for 1993: a)
Company contributions of $4,058 for each executive under the Company's
Employee Stock Ownership Plan; b) Company
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contributions under the Company's Thrift Incentive Plan and interest
accumulated on accounts in the Supplemental Thrift Plan as follows (Dr.
Carlton does not participate in these plans): Mr. Wilde, $10,484; Mr. Kreh,
$2,358; Mr. Wilson, $6,208; and Mr. Kelly, $5,958; c) Company contributions
of $9,405 for Dr. Carlton under the Radian Corporation 401(k) Thrift Plan;
d) $21,638 and $14,652 in life insurance premiums paid in 1993 on behalf of
Mr. Wilde and Dr. Carlton, respectively, in order to fund the Company's
prospective charitable contribution under the Company's Charitable Endowment
Program, described on page 7. Mr. Wilde and Dr. Carlton derive no financial
benefit from the program since all insurance proceeds and charitable
deductions accrue solely to the Company.
(5) Compensation for Mr. Kreh and Dr. Carlton is reported beginning in 1992,
when they became executive officers of the Company.
(6) These amounts represent related tax benefits received upon exercise of stock
options.
STOCK OPTION AND LONG-TERM INCENTIVE PLAN TABLES
The following tables show information with respect to stock options and
potential awards payable in the future under the Company's Long-Term Incentive
Plan for the individuals named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR (ENDED 12/31/93)
INDIVIDUAL GRANTS
--------------------------------------------------------- POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO EXERCISE PRICE APPRECIATION
UNDERLYING EMPLOYEES OR BASE FOR OPTION TERM(2)
OPTIONS IN FISCAL PRICE EXPIRATION ---------------------
NAME GRANTED(1) YEAR ($/SHARE) DATE 5% 10%
- -------------------------- ------------ --------------- ---------- ---------- -------- ----------
Wilson Wilde.............. 43,000 12.1% $57.06 4/19/2000 $998,890 $2,327,590
Gordon W. Kreh............ 9,000 2.5% $57.06 4/19/2000 $209,070 $ 487,170
50,000 14.1% $48.56 9/26/2000 $988,500 $2,303,500
Donald M. Carlton......... 13,700 3.8% $57.06 4/19/2000 $318,251 $ 741,581
10,000 2.8% $48.56 9/26/2000 $197,700 $ 460,700
Donald K. Wilson, Jr...... 16,000 4.5% $57.06 4/19/2000 $371,680 $ 866,080
Kenneth J. Kelly.......... 12,500 3.5% $57.06 4/19/2000 $290,375 $ 676,625
- ------------------------------------
(1) Options granted are nonstatutory stock options. The exercise price of the
option is equal to the fair market value of the stock on the date of the
grant. Payment for the shares as to which an option is exercised may be made
in cash or in shares of Company common stock or a combination of cash and
stock. These options may not be exercised any earlier than one year or any
later than seven years from the date of the grant. Participants will be
permitted to satisfy any federal, state or local tax requirements due upon
exercise of a stock option by delivering to the Company already-owned
Company common stock or by directing the Company to retain stock otherwise
issuable upon such exercise to the participant, having a fair market value
equal to the amount of the tax.
(2) These figures are calculated pursuant to SEC rules by multiplying the number
of options granted by the difference between the option exercise price and a
future hypothetical stock price, assuming the value of Company common stock
appreciates 5% or 10% each year, compounded annually, for a period of seven
years (the life of the options). These figures are not intended to forecast
possible future appreciation, if any, of the Company's stock price.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
(ENDED 12/31/93) AND FY-END OPTION VALUES
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END AT FISCAL YEAR-END
SHARES (#) ($)
ACQUIRED ON VALUE --------------------- --------------------
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- -------------------------- ----------- -------- --------------------- --------------------
Wilson Wilde.............. 0 $0 90,400/43,000 $31,772/$0
Gordon W. Kreh............ 0 $0 11,000/59,000 $0/$0
Donald M. Carlton......... 4,700 $ 75,517 39,700/23,700 $0/$0
Donald K. Wilson, Jr...... 0 $0 45,800/16,000 $17,914/$0
Kenneth J. Kelly.......... 0 $0 31,200/12,500 $0/$0
LONG-TERM INCENTIVE PLAN -- AWARDS IN LAST FISCAL YEAR (ENDED 12/31/93)
ESTIMATED FUTURE PAYOUTS UNDER
NON-STOCK PRICE-BASED PLANS(1)
-----------------------------------
NAME THRESHOLD TARGET MAXIMUM
------------------------------------------- --------- -------- --------
Wilson Wilde............................... 0 $187,500 $300,000
Gordon W. Kreh............................. 0 $ 87,500 $140,000
Donald M. Carlton.......................... 0 $ 92,550 $148,080
Donald K. Wilson, Jr....................... 0 $ 83,750 $134,000
Kenneth J. Kelly........................... 0 $ 63,750 $102,000
- ------------------------------------
(1) Awards under the Company's Long-Term Incentive Plan are calculated annually
based on the Company's achievement of specified Performance Measures
established at the beginning of each rolling three-year Performance Period.
For the period that ended on December 31, 1993, awards were made as
indicated in the Summary Compensation Table located on page 14. The award
payable at the end of each three-year Performance Period is the sum of the
award percentages payable for each Performance Measure multiplied by the
participant's base salary rate in effect for the year the award is being
determined. If all of the performance measures are met for a specific
Performance Period, the target award percentage is 25%. If actual
performance exceeds the Performance Measures, the award percentage will be
increased, up to a maximum of 40%. The award percentage for the Chief
Executive Officer is one and one-half times the award percentage for other
participants. The potential payout amounts reported above were calculated
using base salary amounts in effect for fiscal year 1993. (Dr. Carlton's
award would be payable under Radian Corporation's Long-Term Incentive Plan
but calculated in the same manner as for other executives under the
Company's Long-Term Incentive Plan.)
RETIREMENT PLANS
The following table shows the estimated annual amounts payable on a life
annuity basis to a participant retiring on 12/31/93 at age 65 under the
Company's qualified defined
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benefit pension plan, as well as nonqualified supplemental pension plans that
provide benefits that would otherwise be denied participants by reason of
certain Internal Revenue Code limitations on qualified plan benefits, based on
compensation that is covered under the plans and years of service with the
Company. All executives, other than Dr. Carlton, participate in these plans. Dr.
Carlton is a participant in the Radian Corporation plans described below. (A
small portion of Mr. Kreh's annual retirement benefit as calculated pursuant to
the table shown below will be paid from The Boiler Inspection and Insurance
Company's retirement plan due to Mr. Kreh's initial service and earnings with
that affiliate.)
FINAL YEARS OF SERVICE
AVERAGE -------------------------------------------------------------------------------
EARNINGS 15 20 25 30 35 40 45
- --------- ------- ------- ------- ------- ------- ------- -------
200,000 46,296 61,728 77,161 83,161 89,161 95,161 101,161
300,000 70,296 93,728 117,161 126,161 135,161 144,161 153,161
400,000 94,296 125,728 157,161 169,161 181,161 193,161 205,161
500,000 118,296 157,728 197,161 212,161 227,161 242,161 257,161
600,000 142,296 189,728 237,161 255,161 273,161 291,161 309,161
700,000 166,296 221,728 277,161 298,161 319,161 340,161 361,161
800,000 190,296 253,728 317,161 341,161 365,161 389,161 413,161
900,000 214,296 285,728 357,161 384,161 411,161 438,161 465,161
1,000,000 238,296 317,728 397,161 427,161 457,161 487,161 517,161
1,100,000 262,296 349,728 437,161 470,161 503,161 536,161 569,161
1,200,000 286,296 381,728 477,161 513,161 549,161 585,161 621,161
1,300,000 310,296 413,728 517,161 556,161 595,161 634,161 673,161
1,400,000 334,296 445,728 557,161 599,161 641,161 683,161 725,161
1,500,000 358,296 477,728 597,161 642,161 687,161 732,161 777,161
1,600,000 382,296 509,728 637,161 685,161 733,161 781,161 829,161
1,700,000 406,296 541,728 677,161 728,161 779,161 830,161 881,161
1,800,000 430,296 573,728 717,161 771,161 825,161 879,161 933,161
1,900,000 454,296 605,728 757,161 814,161 871,161 928,161 985,161
Benefits payable under the Company's Retirement Plan are based on the
average of the participant's highest three consecutive years of earnings in the
5-year period before retirement, and on years of service. Earnings covered under
the plan include compensation listed in the Summary Compensation Table under the
"Salary", "Bonus", "Restricted Stock Awards" and "LTIP Payouts" columns.
(Restricted stock awards are included in the year the shares vest due to the
expiration of the restricted period of time, based on the fair market value of
the shares on the vesting date, as opposed to the grant date values listed in
the Summary Compensation Table. Restricted stock awarded after January 1, 1994
is not included in the definition of earnings under the plan.) Covered
compensation and credited years of service as of December 31, 1993 for the
individuals named in the Summary Compensation Table (other than Dr. Carlton, who
does not participate in these plans) are
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as follows: Mr. Wilde: $1,565,416, 41 years; Mr. Kreh: $252,036, 23 years; Mr.
Wilson: $637,096, 32 years; and Mr. Kelly: $492,038, 33 years.
In addition, executive officers (other than Dr. Carlton) are covered under
a supplemental retirement/death benefit program. (This program replaces the
amount of insurance in excess of the $50,000, for which they would otherwise be
eligible, under the group term life insurance program generally available to all
employees of the Company.) The program is funded by insurance contracts on each
covered officer's life. The Company owns the cash values and is a beneficiary
under the policies. Under the terms of the program, if an executive officer
should die prior to his retirement, his beneficiary will be entitled to one of
the following two options that has been selected by the officer: 1) an annual
death benefit equal to 50% (57% for Wilson Wilde) of the officer's base salary
for fifteen years; or 2) three times the officer's base salary at the time of
his death. At retirement the officer is entitled to choose between 1) an annual
retirement supplement equal to either 35% (42% for Wilson Wilde) of the
officer's base salary, for fifteen years; 2) a paid-up insurance policy equal to
three times (four times for Wilson Wilde) the officer's base salary; or 3) the
cash value of the policy. Premiums paid for 1993 on behalf of the individuals
named in the Summary Compensation Table (other than Dr. Carlton, who does not
participate in this program) were as follows: Mr. Wilde, $102,946; Mr. Kreh,
$34,061; Mr. Wilson, $39,547; and Mr. Kelly, $42,534.
Dr. Carlton is covered under two supplemental executive retirement programs
with Radian Corporation. Under the first program, he will receive, if he remains
employed by Radian Corporation until his retirement at age 65, the total sum of
$400,000 paid out over a period of ten years. Premiums paid in 1993 on Dr.
Carlton's behalf for life insurance to fund this benefit were $9,087. Under the
second program, Dr. Carlton will receive a target annual benefit upon his
retirement calculated as follows: three percent of his projected annual
compensation for the year preceding the year in which he attains age 65
(determined by combining his 1990 base salary and bonuses paid under Radian
Corporation's incentive plans, assuming six percent increases in his base salary
and bonuses each year), times years of service (maximum 20 years), minus his
projected annual Social Security benefit, minus the projected annual income
payable on a life annuity basis to him upon retirement that is attributable to
employer contributions to his accounts under the Company's Employee Stock
Ownership Plan and the Radian Corporation 401(k) Thrift Plan, and minus his
annual benefit payable under the first Radian Corporation supplemental executive
retirement program described above. Assuming Dr. Carlton retired from Radian
Corporation at age 65, his annual benefit payable under the plan would be
$159,569.
EMPLOYMENT ARRANGEMENTS
The members of the Board of Directors believe that it is in the best
interests of the stockholders for the Company to have employment agreements with
each of the executive officers (and certain other key employees) to encourage
them to remain in the Company's
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employ during the uncertain times which attend a change in control of the
Company. Each of the executive officers of the Company has entered into such an
agreement. The agreements obligate the officer to remain in the employment of
the Company for six months following a "change in control" (as defined in the
agreements) of the Company. If an officer is dismissed from the Company for any
reason other than retirement, disability or defalcation within the six-month
period, or if an officer leaves voluntarily or is dismissed from the Company for
any reason other than retirement, disability or defalcation after the six-month
period, he is entitled to receive 299% of his average annualized base salary and
bonuses for the five years preceding the change in control. The Company has
established a trust (presently unfunded) pursuant to which payments under these
agreements and certain other benefit plans will be paid in the event of a change
in control.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Alvord, Mr. Campbell, Mr. Powers, Dr. Vatter and Mr. Ferland, none of
whom is an employee of the Company or a subsidiary, served on the Compensation
Committee of the Board of Directors of the Company in 1993. Mr. Alvord,
Chairman, Chief Executive Officer and a director of Shawmut National
Corporation, acts as Chairman for the Compensation Committee, and Mr. Wilde,
Chairman and Chief Executive Officer of the Company, serves on the Board of
Shawmut National Corporation. Shawmut Bank, a subsidiary of Shawmut National
Corporation, performed various services for the Company in 1993, among which
were acting as the trustee for the Company's Thrift Incentive Plan, the
Retirement Plan and the Employee Stock Ownership Plan. The Company and certain
of its subsidiaries also maintained various accounts with Shawmut Bank during
1993. In the opinion of the Company, the fees for these services were comparable
to those charged by other financial institutions. The Company and its
subsidiaries maintain banking relationships with various other financial
institutions.
In 1985 the trustee for the Employee Stock Ownership Plan (ESOP) borrowed
$5,000,000 from Shawmut Bank to purchase stock from the Company to fund the
trust established under the plan. The ESOP trustee also borrowed $10,000,000
from Massachusetts Mutual Life Insurance Company for this purpose. Mr. Dooley is
a consultant to Massachusetts Mutual Life Insurance Company and was, until his
retirement in 1993, Executive Vice President and Chief Investment Officer of
that company. Both loans were for ten-year terms and were guaranteed by the
Company. The Company believes that such loans were made on substantially the
same terms and interest rates as those prevailing at other lending institutions
for comparable transactions.
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PERFORMANCE GRAPH
The following line-graph compares cumulative, five-year shareholder returns
on Company common stock on an indexed basis with the S&P 500 Stock Index and the
S&P 500 Property/Casualty Insurance Index, based on an initial investment on
December 31, 1988 of $100.
Measurement Period
(Fiscal Year Covered) HSB S&P 500 S&P P/C
1988 100.00 100.00 100.00
1989 150.48 131.69 146.19
1990 141.82 127.60 142.85
1991 173.06 166.47 178.84
1992 182.54 179.15 209.44
1993 144.89 197.21 205.73
PROPOSAL 2
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors recommends that the firm of Coopers & Lybrand be
appointed as independent public accountants for the Company for the year ending
December 31, 1994. Coopers & Lybrand has served as the Company's independent
public accountants since 1965.
Representatives of Coopers & Lybrand will be present at the meeting to make
a statement if they wish to do so, and will be available to respond to
appropriate questions raised by stockholders.
Unless otherwise directed, the shares represented by the enclosed proxy
card will be voted for the appointment of Coopers & Lybrand as independent
public accountants for 1994. The affirmative vote of a majority of the votes
represented at the meeting is required for approval of their appointment.
The Board of Directors unanimously recommends a vote FOR Proposal 2.
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DEADLINE FOR STOCKHOLDER PROPOSALS
Stockholders who wish to submit written proposals for possible inclusion in
next year's proxy statement must make certain that they are received no later
than November 1, 1994. Proposals should be sent to the Corporate Secretary, The
Hartford Steam Boiler Inspection and Insurance Company, One State Street,
Hartford, Connecticut 06102.
OTHER BUSINESS TO COME BEFORE THE MEETING
The management does not know of any matters to be presented for
consideration at the meeting other than the matters described in the Notice of
Annual Meeting; but if other matters are presented, it is the intention of the
persons named in the accompanying proxy to vote on such matters in accordance
with their judgment.
ADDITIONAL INFORMATION AVAILABLE
THE COMPANY FILES AN ANNUAL REPORT ON FORM 10-K WITH THE SECURITIES AND
EXCHANGE COMMISSION. STOCKHOLDERS MAY RECEIVE A COPY OF THE 10-K BY SENDING A
WRITTEN REQUEST TO THE TREASURER, THE HARTFORD STEAM BOILER INSPECTION AND
INSURANCE COMPANY, ONE STATE STREET, HARTFORD, CONNECTICUT 06102.
By Order of the Board of Directors,
R. K. PRICE
Corporate Secretary
Printed on recycled paper
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THE HARTFORD STEAM BOILER
INSPECTION AND INSURANCE COMPANY
ONE STATE STREET, HARTFORD, CONNECTICUT 06102
ANNUAL MEETING OF STOCKHOLDERS - APRIL 19, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Colin G. Campbell, John A. Powers, Paul A.
Vatter and John M. Washburn, Jr. each with the power to appoint his substitute,
and hereby authorizes them to represent and to vote, as designated on the
reverse side, all the shares of common stock of the Company held on record by
the undersigned on February 8, 1994 at the Annual Meeting of Stockholders to be
held on April 19, 1994 or any adjournment thereof, hereby revoking any proxy
heretofore given.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
(Important - To be signed and dated on reverse side) SEE REVERSE
SIDE
25
Please mark
/X/ votes as in
this example
FOR AGAINST ABSTAIN
1. Election of Directors 2. Appointment of independent / / / / / /
NOMINEES: Donald M. Carlton, William B. Ellis, public accountants.
E. James Ferland and Wilson Wilde.
FOR WITHHELD
/ / ALL / / FROM ALL
NOMINEES NOMINEES
/ / MARK HERE MARK HERE
-------------------------------------- FOR ADDRESS / / FOR COMMENTS / /
For all nominees except as noted above CHANGE AND AND NOTE
NOTE AT LEFT ABOVE
Please sign exactly as your name appears. If acting as
attorney, executor, trustee or in other representative
capacity, sign name and title. Please date proxy and
return in the enclosed post-paid return envelope.
Signature: Date
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Signature: Date
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