Exhibit 10.30
THE TRAVELERS SEVERANCE PLAN
FOR OFFICERS
As Amended and Restated September 23, 1993
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Section I - Definitions
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The following words and phrases shall have the meaning
stated below:
1. "Company" means The Travelers Corporation and its
affiliates as set forth in Appendix A.
2. "Committee" means the Employee Benefits Committee
established pursuant to the provisions of the Pension
Plan.
3. "Continuous Service" means the period of employment of
an Employee as determined by the Company. Salaried
Service with a member of The Travelers controlled group
shall be taken into account in determining Continuous
Service.
4. "Employee" means any officer employee or manager with a
Company pay code of 30, 31 or 32 who is regularly
employed on a full-time salaried basis and who is on a
U.S. dollar payroll of a participating Company.
Eligibility for benefits under this plan disqualify the
employee from benefits under The Travelers Severance
Plan (Non-Officer).
5. "Group Benefit Plan" means The Travelers Group
Insurance and Health Benefit Plan.
6. "Plan" means The Travelers Severance Plan for officers
as set forth herein, or in any amendment hereto.
7. "Pension Plan" means the Pension Plan for Salaried
Employees of The Travelers Corporation and Certain of
its Subsidiaries.
8. "Salary" means the basic salary of the Employee
immediately preceding the Severance Date, as determined
by the Company in accordance with its rules and entered
on its records, exclusive of bonus, overtime pay, or
other additional remuneration in any form paid to the
Employee.
9. "Savings Plan" means The Travelers Employee Stock
Ownership and Investment Plan.
10. "Severance Date" means the last date of active
employment, or if later, the date for which the
Employee was last paid Salary.
Section II - Purpose of Plan
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The Plan provides for the payment of severance benefits to
eligible Employees of participating Companies in the event their
employment is terminated involuntarily because of the elimination
of a job or the closing of an operation.
Section III - Effective Date
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The Plan became effective September 14, 1987. Benefits
payable prior to April 1, 1988 are in accordance with the terms
and conditions of those benefits as announced from time-to-time.
For Severance Dates on or after April 1, 1988, the severance
benefit shall be determined in accordance with the terms
hereunder, except as previously announced.
Section IV - Eligibility for Severance Benefits
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1. General Eligibility
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An Employee of a participating Company whose employment
is terminated involuntarily, either because of the
elimination of a specific position or the closing of an
operation of the Company, may be eligible for a
severance benefit under the Plan. However, an Employee
shall not be eligible for a benefit under the Plan if a
participating Company or another company affiliated
with The Travelers Corporation offers a substitute
position which, at the sole discretion of the Company,
is deemed commensurate with the Employee's former
position, and the Employee does not accept that
position.
2. Effect of Sale or Other Disposition of a Participating
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Company
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An Employee shall not be eligible for benefits
under the Plan if there is a sale or other disposition
of a participating employer Company (or an operating
unit or division thereof), and the Employee continues
such employment after the date of sale or other
disposition. If the Employee's position is eliminated
subsequent to the sale or other disposition, the
Employee shall not be eligible for a severance benefit
under the Plan.
Section V - Benefits
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1. Amount of Severance Benefit
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An Employee who is determined eligible for benefits
under the Plan shall be paid two weeks Salary for each
year of Continuous Service completed with the Company,
subject to a maximum of 52 weeks Salary for 26 or more
years of Continuous Service. Weekly Salary shall be
determined at the Salary rate in effect on the
Severance Date.
2. Payment of Severance Benefit
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The severance benefit under the Plan shall be paid
either in a lump sum, or in installments no less
frequently than monthly, as elected by the Employee. A
lump sum, or the first installment, shall be paid on
the Severance Date, or as soon thereafter as is
practicable, and certain employee benefits provided by
the Company shall continue to the extent provided in a.
and b. below. The severance benefit shall not be paid
over a time period that exceeds the number of weeks for
which it is paid.
a. Employee Benefit Continuation Upon Election of
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Installment Payments
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If an Employee elects to have the severance benefit
paid in installments, health and dental benefit
coverage, but not life insurance coverage shall
continue under the Group Benefit Plan during the
installment payment period, unless the Employee elects
to discontinue such coverage. The Company shall
continue its contributions, and Employee contributions
shall be offset against severance payments. The
Employee shall be credited with Continuous Service
under the Retirement Plan and the Savings Plan for the
equivalent period for which severance payments are
made. However, the Employee will not be allowed to
make contributions under the Savings Plan, and the
Company will not make Company contributions under that
Plan on the Employee's behalf during such period. The
severance payment and the period for which severance is
deemed payable are not included in the calculation of
Final Average Salary under the Pension Plan.
b. Employee Benefit Continuation Upon Election of Lump Sum
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If the Employee elects to have a severance benefit paid
in a lump sum, the amount of the benefit shall be
discounted at a 7% annual interest rate. Coverage
under the Group Benefit Plan shall cease as of the
Severance Date, unless the Employee is eligible for
post-retirement coverage under the Group Benefit Plan,
based on the employee's age and years of service. The
Employee shall be credited with Continuous Service
under the Pension Plan and the Savings Plan for the
time period over which severance benefits would have
been paid if installment payments had been elected.
The severance payment is not included in the
calculation of Final Average Salary under the Pension
Plan.
c. Death of Employee
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In the event of the Employee's death, the right to
payment of a severance benefit shall be determined by
reference to the Employee's Severance Date. If the
Employee is determined to be eligible for a severance
benefit but dies prior to the Severance Date, neither
the Employee nor the Employee's estate shall be
entitled to benefits under this Plan. However, if the
Employee dies after installment payments have begun,
the Employee's estate shall be paid the full amount
of the remaining installments in a lump sum.
d. Return to Employment with Company
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If the Employee is paid a severance benefit under the
Plan and becomes reemployed by the Company or another
participating Company before all of the installments
are paid, the Employee shall not be entitled to the
remaining installments. An Employee who elected a lump
sum payment will be required as a condition of
reemployment to return a pro rata portion of the
payment based upon the number of remaining installments
that would have been paid if a lump sum had not been
elected.
Section VI - Benefits Not Funded
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Except as provided in Section X, it is intended that
benefits under the Plan shall be paid by the Company out of its
general assets and that the Plan will be unfunded.
Section VII - Administration
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1. The Plan shall be administered by the Committee, which
shall be the named fiduciary of the plan within the
meaning of the Employee Retirement Income Security Act
of 1974, in accordance with its terms and purposes.
The Committee shall determine the amount and manner of
payment of benefits due to or on behalf of each
Employee from the Plan, and shall cause them to be paid
by the Company accordingly.
2. The decisions and actions of the Committee shall be
final, conclusive, and binding on all parties affected
thereby, and the Committee shall not be subject to
individual liability with respect to the Plan.
3. The Committee is authorized to delegate the daily
management of the Plan.
4. If a written request by an Employee for the payment of
any benefits hereunder has been rejected by the
Committee, the Committee shall within a reasonable
period of time notify the Employee of such rejection in
writing, setting forth the specific reasons for such
rejection. Such written explanation shall be written
in a manner calculated to be understood by the
Employee.
5. The Committee shall afford any Employee whose claim for
benefits has been rejected a reasonable opportunity for
review of such claim.
Section VIII - Amendment and Termination
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The Company intends to maintain the Plan as long as deemed
necessary. However, the Company reserves the right to amend or
terminate it at any time for whatever reasons deemed appropriate.
Section IX - Miscellaneous
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1. Eligibility for benefits under the Plan shall not give
any Employee the right to be retained in the employment
of the Company or any right or interest in the Plan.
2. No Employee shall have the right to assign, commute or
encumber any benefits or payments herein provided. To
the maximum extent permitted by law, the benefits or
payments provided under the Plan shall not be liable to
attachment, garnishment or other process, or to be
seized, taken, appropriated or applied by any legal or
equitable process, to pay any debt or liability of the
Employee.
Section X - Special Benefits Continuation
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1. Generally
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Notwithstanding any other provision of the Plan to the
contrary, this Section shall govern eligibility for and
payment of benefits under the Plan from September 23,
1993 through December 31, 1995.
2. Definitions
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For purposes of this Section, the following definition
shall apply:
"Cause" means:
(i) Unlawful acts intended to result in the substantial
personal enrichment of an Employee at Travelers
expense.
(ii) An Employee engages in a material violation of his or
her responsibilities to Travelers that results in
material injury to Travelers.
(iii) Gross misconduct on the part of an Employee which
is demonstrably detrimental to Travelers.
3. Amendment or Modification of Plan
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Other than as necessary to implement the resolutions of
the Board of Directors on September 23, 1993, from
September 24, 1993 through December 31, 1995, the Plan
shall not be amended, modified or adjusted in any
manner that would reduce or adversely affect benefits
provided under the Plan as in effect on September 23,
1993.
4. Benefits
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a. Severance Benefit
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If on or after September 23, 1993 and before January 1,
1995 an Employee's employment is terminated without
Cause, the Employee shall be paid a lump sum severance
benefit equal to 200 percent of the basic severance
benefit determined under Section V(1). If after
December 31, 1994 and before January 1, 1996 an
Employee's employment is terminated without Cause, the
employee shall be paid a lump sum severance benefit
equal to 100 percent of the basic severance benefit
determined under Section V(1).
Notwithstanding the other provisions of this Plan, (i)
an Employee shall be treated as having been terminated
by the Company without "Cause" if the Employee
terminates his or employment within 30 days after any
reduction in the Employee's Salary to which the
Employee has not given written consent; and (ii) in
order to determine the eligibility of an Employee for
a severance benefit pursuant to this Section X, and the
amount of such benefit, "Salary" shall mean the higher
of such Employee's (x) basic salary, as in effect on
September 23, 1993, and (y) any higher amount of basic
salary paid to the Employee at any time after September
23, 1993.
b. Group Benefit Plan, Retirement Plan, Savings Plan
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The severance benefit determined under this Section
X shall be treated for purposes of coverage under the Group
Benefit Plan and for purposes of additional credit for
Continuous Service under the Retirement Plan and the Savings
Plan as having been paid over a period that is 200 percent and
100 percent, as the case may be, of the equivalent periods
under the basic Severance Plan. Additional Continuous Service
shall be credited to the Employee for the period for which the
lump sum is deemed payable. However, the Employee will not be
allowed to make contributions under the Savings Plan, and the
Company will not make Company contributions under that Plan on
the Employee's behalf during such period. The severance payment
and the period for which severance is deemed payable are not
included in the calculation of Final Average Salary under the
Retirement Plan. An Employee who becomes entitled to a severance
benefit under this Section X shall become 100% vested in the
Company Contributions Account under the Savings Plan and will
have a 100% vested interest in the accrued benefit under the
Retirement Plan.
c. An Employee who becomes entitled to a severance benefit
under this Section X shall not be entitled to a basic
severance benefit under the Plan.
5. Amendments
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Prior to September 23, 1993 and after December 31,
1995, this Section X shall be subject to amendment,
suspension, modification or termination by the Company
at any time, provided that no such amendment,
suspension, modification or termination shall affect
the rights under the Plan, including without limitation
this Section X, of any Employee whose Severance Date
occurs on or after September 23, 1993 and before
January 1, 1996. Other than as necessary to implement
the resolutions of the Board of Directors on September
23, 1993, from September 24, 1993 through December 31,
1995, the Plan shall not be amended, suspended,
modified or terminated in a manner that would
eliminate, reduce, or otherwise affect any Employee's
rights hereunder, including the ability to earn future
benefits from continuation of the Plan.
6. Enforcement of Rights
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To the extent that amounts have been contributed to the
Travelers Benefit Continuation Trust, any Employee
(including a former Employee or beneficiary) may apply
to the trustee of The Travelers Benefits Continuation
Trust for assistance in enforcing any rights and
pursuing any claim arising under this Section X
provided, however, that any such Employee or
beneficiary who applies for such assistance shall be
subject and bound by any limitations and conditions
that such trustee may impose.
No Employee or beneficiary shall be required to notify
or seek the assistance of such trustee as a condition
for or prerequisite to any other action that might be
taken by or on behalf of the Employee or beneficiary in
order to enforce any rights or pursue any claims under
the Plan, and the fees, expenses and costs that the
Employee or beneficiary may incur in connection with
such action shall not be the responsibility of The
Travelers Corporation Benefits Continuation Trust or
the trustee thereof.
7. Outplacement Services
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An Employee who becomes entitled to benefits under this
Section X on or after September 23, 1993 and before
January 1, 1996 shall be eligible for full outplacement
services, including individual counseling, resume
preparation, and use of an office, telephone and
secretarial support for the time period specified in
the outplacement arrangement provided.
Section XI. - Certain Additional Payments by the Company.
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(a) Anything in this Plan to the contrary notwithstanding,
in the event it shall be determined that any payment or
distribution by the Company to or for the benefit of the employee
(whether paid or payable or distributed or distributable pursuant
to the terms of this Plan or otherwise, but determined without
regard to any additional payments required under this Section XI)
(a "Payment") would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties are
incurred by the Employee with respect to such excise tax (such
excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), the
employee shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the
Employee of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, the Employee retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section XI(c), all
determinations required to be made under this Section XI,
including whether and when a Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by
Coopers & Lybrand or such other certified public accounting firm
as may be designated by the Employee (the "Accounting Firm")
which shall provide detailed supporting calculations both to the
Company and the Employee within 15 business days of the receipt
of notice from the Employee that there has been a Payment, or
such earlier time as is requested by the Company. In the event
that the Accounting Firm is serving as accountant or auditor for
Travelers or Primerica Corporation, the Employee shall appoint
another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder). All fees
and expenses of the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant to this
Section XI, shall be paid by the Company to the Employee within
five days of the receipt of the Accounting Firm's determination.
If the Accounting Firm determines that no Excise Tax is payable
by the Employee, it shall furnish the Employee with a written
opinion that failure to report the Excise Tax on the Employee's
applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination
by the Accounting Firm shall be binding upon the Company and the
Employee. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have
been made ("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section XI(c) and the Employee
thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the Employee.
(c) The Employee shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later
than ten business days after the Employee is informed in writing
of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid.
The Employee shall not pay such claim prior to the expiration of
the 30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If
the Company notifies the Employee in writing prior to the
expiration of such period that it desires to contest such claim,
the Employee shall:
(i) give the Company any information reasonably requested
by the Company relating to such claim,
(ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing
from time to time, including, without limitation, accepting
legal representation with respect to such claim by an
attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly
all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall
indemnify and hold the Employee harmless, on an after-tax basis,
for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section XI(c), the
Company shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings, and
conferences with the taxing authority in respect of such claim
and may, at its sole option, either direct the Employee to pay
the tax claimed and sue for a refund or contest the claim in any
permissible manner, and the Employee agrees to prosecute such
contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that
if the Company directs the Employee to pay such claim and sue for
a refund, the Company shall advance the amount of such payment to
the Employee, on an interest-free basis and shall indemnify and
hold the Employee harmless, on an after-tax basis from any Excise
Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to
any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Employee
with respect to which such contested amount is claimed to be due
is limited solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder
and the Employee shall be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the Employee of an amount
advanced by the Company pursuant to Section XI(c), the Employee
becomes entitled to receive any refund with respect to such
claim, the Employee shall (subject to the Company's complying
with the requirements of Section XI(c)) promptly pay to the
Company the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto). If,
after the receipt by the Employee of an amount advanced by the
Company pursuant to Section XI(c), a determination is made that
the Employee shall not be entitled to any refund with respect to
such claim and the Company does not notify the Employee in
writing of its intent to contest such denial of refund prior to
the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid
and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
APPENDIX A
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The Travelers Insurance Company
The Travelers Indemnity Company
The Phoenix Insurance Company
The Charter Oak Fire Insurance Company
The Travelers Indemnity Company of Rhode Island
The Travelers Indemnity Company of Illinois
The Travelers Insurance Company of Illinois
The Travelers Life and Annuity Company
The Travelers Investment Management Company
Travelers Equities Sales, Inc.
Center for Corporate Health, Inc.
The Prospect Company
Constitution Plaza, Inc.
The Plaza Corporation
Exsure, Inc.
The Constitution State Insurance Company
Constitution State Service Company
Travelers/E.B.S., Inc.
The Travelers Health Network, Inc.
The Travelers Health Network of California, Inc.
The Travelers Health Network of Illinois, Inc.
The Travelers Health Network of Louisiana, Inc.
The Travelers Health Network of New York, Inc.
The Travelers Health Network CMP of Tennessee, Inc.
The Travelers Health Network of Texas, Inc.