Exhibit 10.12
ARTHUR J. GALLAGHER & CO.
DEFERRAL PLAN FOR NONEMPLOYEE DIRECTORS
AMENDED AND RESTATED AS OF FEBRUARY 1, 2022
Purpose
The purpose of this Arthur J. Gallagher & Co. Deferral Plan for Nonemployee Directors is to provide Nonemployee Directors with the opportunity to defer the receipt of all or a portion of the Annual Retainer or Restricted Stock Awards which they earn as directors of the Company. All capitalized terms used in the Plan shall have the meanings set forth in Article II.
Definitions
“Annual Retainer” means the annual cash retainer earned by a Nonemployee Director for his or her service on the Board or any committee thereof.
“Board” means the Board of Directors of the Company.
“Code” means the Internal Revenue Code of 1986, as amended.
“Committee” means the Compensation Committee of the Board.
“Common Stock” means the common stock of the Company, par value $1.00 per share.
“Company” means Arthur J. Gallagher & Co., a Delaware corporation.
“Deferral” shall have the meaning set forth in Section 4.2.
“Deferral Account” means a bookkeeping account in the name of a Nonemployee Director who elects to defer, pursuant to the Plan, all or a portion of his or her Annual Retainer or Restricted Stock Awards.
“Deferral Election” shall have the meaning set forth in Section 4.2.
“Distribution Date” shall have the meaning set forth in Section 6.1.
“Effective Date” means February 1, 2022.
“Fair Market Value” means the closing transaction price of a share of Common Stock as reported on the New York Stock Exchange on the date as of which such value is being determined or, if the Common Stock is not listed on the New York Stock Exchange, the closing transaction price of a share of Common Stock on the principal national stock exchange on which
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the Common Stock is traded on the date as of which such value is being determined or, if there shall be no reported transactions for such date, on the next preceding date for which transactions were reported; provided, however, that if the Common Stock is not listed on a national stock exchange or if Fair Market Value for any date cannot be so determined, Fair Market Value shall be determined by the Committee by whatever means or method as the Committee, in the good faith exercise of its discretion, shall at such time deem appropriate.
“Nonemployee Director” means any director serving on the Board, other than a director who is an officer or employee of the Company or any Subsidiary.
“Plan” means this Arthur J. Gallagher & Co. Deferral Plan for Nonemployee Directors, as amended from time to time.
“Plan Year” means the 12-month period coinciding with the calendar year.
“Restricted Stock Award” means an award of restricted stock units granted to a Nonemployee Director for his or her service on the Board or any committee thereof.
“Separation Date” means the date on which a Nonemployee Director separates from service as a director of the Company, within the meaning of Section 409A of the Code.
“Share Unit” means a bookkeeping unit credited to a Nonemployee Director’s Deferral Account and having a value equal to one share of Common Stock.
“Subsidiary” means any corporation or other business entity, the majority of the outstanding voting stock or other equity interests of which are owned, directly or indirectly, by the Company.
“Trust” shall have the meaning set forth in Article IX.
“Unforeseeable Emergency” means (i) a severe financial hardship to a Nonemployee Director resulting from an illness or accident of the Nonemployee Director, or the spouse or a dependent (as defined in Section 152(a) of the Code) of the Nonemployee Director, (ii) the loss of a Nonemployee Director’s property due to casualty or (iii) such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Nonemployee Director, within the meaning of Section 409A of the Code.
Administration
The Plan shall be administered by the Committee. The Committee shall, subject to the terms of this Plan, interpret this Plan and the application thereof, and establish rules and regulations it deems necessary or desirable for the administration of this Plan. All such interpretations, rules and regulations shall be final, binding and conclusive. The Committee may delegate administrative duties under the Plan to one or more employees or agents of the Company or its Subsidiaries, as it shall deem necessary or advisable. The Company shall indemnify and hold harmless the members of the Committee, and any agent to whom duties of the Committee may be delegated, against any and all claims, losses, damages, expenses or
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liabilities arising from any action or failure to act with respect to the Plan, except in the case of willful misconduct by the Committee or any of its members or any such agent.
Deferral Elections
Deferral Accounts
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Payment of Deferral Accounts
(a) upon the Nonemployee Director’s Separation Date; or
(b) upon the first day of any Plan Year which is at least three years after the first day of the Plan Year for which the Deferral Election is being made (the “Distribution Date”).
Except as otherwise specifically provided herein, amounts credited to a Nonemployee Director’s Deferral Account with respect to each Deferral, including all dividend equivalents pursuant to Section 5.2 and other earnings pursuant to Section 5.3, shall be paid to such Nonemployee Director in a single lump sum payment as soon as administratively practicable after the Nonemployee Director’s Distribution Date with respect to such Deferral, but in no event later than 90 days thereafter.
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Payment Upon Death of a Nonemployee Director
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Funding
Benefits payable under the Plan to any Nonemployee Director shall be paid by the Company. The Company shall not be required to fund, or otherwise segregate assets to be used for payment of benefits under the Plan. Notwithstanding the foregoing, the Company, in the discretion of the Committee, may maintain one or more grantor trusts (each, a “Trust”) to hold assets to be used for payment of benefits under the Plan. The assets of the Trust shall remain the assets of the Company subject to the claims of its general creditors. Any payments by a Trust of benefits provided to a Nonemployee Director under the Plan shall be considered payment by the Company and shall discharge the Company of any further liability under the Plan for such payments.
General
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