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Exhibit 10.P.(3)
December 10, 1993
Mr. Judd R. Cool
Vice President-Human Resources
0 F F I C E
This letter will clarify, restate and supersede in their entirety all
provisions for supplemental pension and other benefits arrangements referred to
(a) under the heading "Benefits" in that certain letter from Frank W. Luerssen,
as Chairman and Chief Executive Officer of Inland Steel Industries, Inc. ("the
Company"), to you dated September 2, 1987 and (b) in that certain letter from
Frank W. Luerssen to you dated November 23, 1987.
A. Supplemental Pension Benefits
Upon your retirement as an employee of the Company, the Company will make
supplemental pension payments to you equal to the excess, if any, of payments
you would have received under the Company's qualified and non-qualified pension
plans as if your total Company and prior employer's (Kennecott's) service and
earnings were included in the calculation of benefit payments under such plans
over (i) payments you would receive from your prior employer's qualified and
non-qualified pension plans (based on your actual vested benefits under those
plans, but paid on the commencement date and in accordance with the annuity
form of payment under the Inland Steel Industries Pension Plan Supplement For
Salaried Employees of Inland Steel Industries, Inc. and Certain Subsidiaries
(the "Plan")) and (ii) payments you actually receive from the Company's
qualified and non-qualified pension plans. Any such supplemental pension
benefits paid to you or to your Surviving Spouse (as defined in the Plan) shall
begin upon the commencement of payments under the Company's pension plans and
shall be of the same annuity form as benefit payments made under the Plan,
provided, however, that upon your death at any time prior to or after your
retirement, your Surviving Spouse will be deemed to be immediately eligible to
receive a Surviving Spouse Benefit (as defined in the Plan), and provided,
further, that if you had not attained the age of 62 at the time your Surviving
Spouse first becomes entitled to receive any supplemental pension payments
hereunder, the amount of such payments shall be calculated as if you had then
attained such age and for service purposes had continued to be employed by the
Company until the attainment of such age.
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B. Salary Continuation Benefit
You shall be entitled to a monthly salary continuation benefit on your
retirement at or after age 60 or on your attainment of age 60 under certain
other circumstances. The amount of such benefit shall be one two hundred
fortieth (1/240) of your Salary Continuation Benefit Amount (referred to
below), payable to you on the first day of each month during the period
commencing with the month immediately following your retirement at or after age
60 and ending with the two hundred fortieth (240th) payment. If your
employment with the Company terminates prior to your attainment of age 60 for
any reason other than your voluntary resignation or for cause, and if you
thereafter live to age 60, you will be entitled to this benefit for a period
commencing with the month immediately following your attainment of age 60 and
ending with the two hundred fortieth (240th) payment. The Salary Continuation
Benefit Amount referred to above, which is a percentage of your annual base
salary at retirement (or in the event that the immediately preceding sentence
applies, 360% of your annual base salary at the time your employment with the
Company terminates), shall be determined in accordance with the following
table:
Salary Continuation
Benefit Amount
(% of Annual Base
Your Age at Retirement Salary at Retirement)
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60 360%
61 380
62 or more 400
If you die prior to receiving all monthly salary continuation benefit payments
to which you are entitled in accordance with these provisions, all remaining
payments shall be made to your spouse (payable to her on the first day of each
month during the remainder of the period), or if she has predeceased you or
dies prior to receiving all payments to which she is entitled, a lump sum
amount equal to the present value of all then remaining monthly payments shall
be made to your estate. The discount rate for purposes of calculating the
present value of such payments shall be the interest rate used by the PBGC in
valuing immediate benefits.
C. Life Insurance Coverage
The Company will provide you with insurance on your life having a death
benefit equal to (a) during the period of your employment with the Company,
300% of your then annual base salary (determined as of each January 1 during
such period) and (b) upon your retirement from the Company and thereafter
during your lifetime, 60% of the death benefit in force at the time of your
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retirement (with the other 40% of such coverage to be retained by you, in whole
or in part, at your option, and at your own personal expense). If the life
insurance program of the Company for eligible employees and retirees provides
for death benefits in your case that are less than the amount or amounts
stipulated above, the Company will provide you with such additional insurance
on your life as may be necessary to provide the stipulated coverage. For this
purpose, you agree to cooperate fully with the company in the acquisition of
such life insurance (or additional life insurance, as the case may be), on a
term or whole-life basis, through the purchase of life insurance on a
"split-dollar" basis, by the exercise of any conversion option available to you
under the Company's life insurance program for eligible employees and retirees,
or otherwise; and it is understood that your interest and(or) the interest of
any beneficiary in such life insurance shall be limited to the death benefit
provided thereunder. All Federal, state and local income taxes payable with
respect to the acquisition and maintenance of any insurance on your life shall
be for your account.
D. Retiree Health Care Coverage
If you are not eligible on your retirement, or if your spouse is not eligible
on your death prior to your retirement, to participate in the Company's health
care program then in force for eligible retirees and their spouses, the Company
will thereafter provide you and(or) your spouse with such health care coverage
as may from time to time be provided by the Company for eligible retirees and
their spouses, subject to the following:
(a) the coverage provided to you and (or) your spouse will be subject to all
of the terms, limitations and conditions of such coverage, other than
the requirement that you complete at least 10 years of service for
eligibility for such coverage;
(b) you (or your spouse) shall be required to make the contributions that
are generally required of other retirees (or their spouses) from time to
time; and
(c) to the extent determined by the Company, the value of the coverage in
excess of the amount described in paragraph (b) shall be reported as
taxable income to you (or your spouse) each year.
To the extent that the value of the health care coverage provided to you (or
your spouse) is includible in your income (or your spouse's income) for income
tax purposes pursuant to paragraph (c) above and to the extent such amounts
would not be includible in your income (or your spouse's income) for income tax
purposes if you had continued in the employ of the Company until such time as
you would otherwise have been eligible for coverage under the
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Company's health care program for eligible retirees and their spouses, the
Company will pay to you (or your spouse) each year an amount which is equal to
the sum of:
(1) the aggregate amount of additional Federal, state or local income taxes
payable by you (or your spouse) for that year as a result of the fact
that the value of the health care coverage was includible in your
taxable income (or your spouse's taxable income) pursuant to paragraph
(c) above;
(2) the aggregate amount of additional Federal, state and local income taxes
payable by you (or your spouse) for that year as a result of the payment
made to you (or your spouse) pursuant to paragraph (1).
Nothing in this Agreement shall require, or shall be construed so as to
require, the Company or any of its affiliates to establish, maintain or
continue to maintain any health care program for retirees of the Company or
their spouses.
Please acknowledge your agreement with respect to these matters by signing
and returning to me the enclosed copy of this letter.
Sincerely,
/s/ Robert J. Darnall
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Robert J. Darnall
Chairman, President and
Chief Executive Officer
Acknowledged and agreed
to this 13th day of
December, 1993.
/s/ Judd R. Cool
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Judd R. Cool