Exhibit 10.4
THE OHIO CASUALTY INSURANCE COMPANY
BENEFIT EQUALIZATION PLAN
Adopted as of August 16, 1990 Retroactive to July 1, 1990
June 2002
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FORWARD
Effective as of July 1, 1990, the Ohio Casualty Insurance Company has
adopted The Ohio Casualty Insurance Company Equalization Plan (the "Plan")
for the benefit of certain of its employees. It is intended that the
"excess benefits" provided under the Plan be an unfunded "excess benefit
plan" as that term is defined in Section 3(36) of the Employee Retirement
Income Security Act of 1974, and that the "supplemental benefits" provided
under the Plan be an unfunded deferred compensation plan for "a select group
of management or highly compensated employees" as that term is used in the
Employee Retirement Income Security Act of 1974.
The purpose of the Plan is to provide eligible participants and their
Beneficiaries with the amount of Company-provided benefits that would have
been provided under the Employees Retirement Plan of The Ohio Casualty
Insurance Company ("Retirement Plan") but for the limitations on benefits
imposed under Section 415 of the Internal Revenue Code and the limitation on
compensation for purposes of Retirement Plan imposed by Section 401(a)(17)
of such Code.
SECTION ONE
1.1 Except to the extent otherwise indicated herein, and to the extent
otherwise inappropriate in the context, the definitions contained in
Section 1 of the Retirement Plan are application under the Plan.
1.2 "Actuarial Equivalent Present Value" means, with respect to Excess
Benefits and/or Supplemental Benefits, the lump sum actuarial
present value of the aggregate amount of such Excess Benefits and/or
Supplemental Benefits payable to or with respect to a participant in
accordance with the terms of the Plan. Such lump sum actuarial
equivalent present value shall be determined on the basis of
(a) the same mortality table used for the most current
accounting valuation for the Retirement Plan, and
(b) the PBGC interest rate then in effect for purposes of
valuing immediate annuities for terminating plans in
accordance with requirements of Section 4062 of ERISA,
adjusted by multiplying such rate by (1 minus the marginal
tax rate {reflecting,
June 2002
for this purpose, the combined Ohio and federal marginal tax
rates}), and further adjusted by rounding such rate as so
determined to the nearest 1/4%.
1.3 "Beneficiary" means the beneficiary or beneficiaries (who may be any
one or more members of his family or other persons, executors,
administrators, any trust foundation or other entity) designated by
the participant, at such time and in such manner as the Company
shall determine, to receive any benefits payable hereunder after the
death of the participant as provided herein. If no beneficiary has
been designated, or if all designated beneficiaries have predeceased
the participant, the Beneficiary shall be the participant's legal
representative or, if no legal representative shall have been
appointed within six (6) months after the death of the participant,
then to and among such one or more of the spouse and blood relatives
of such deceased participant as the Company may in its sole
discretion appoint.
1.4 "Board of Directors" mean the Board of Directors of The Ohio
Casualty Insurance Company.
1.5 "Company" means The Ohio Casualty Insurance Company, or any entity
which shall be a successor to it in ownership of substantially all
of its assets and which shall assume all of its rights and
obligations under the Plan.
1.6 "Excess Benefit" means the excess, if any, of (i) the retirement
benefit which would have been payable to or with respect to a
participant at his benefit commencement date under the Retirement
Plan had the limitations on benefits imposed by Section 14 of the
Retirement Plan not been applicable over (ii) the retirement benefit
payable to or with respect to the participant at his benefit
commencement date under the Retirement Plan.
1.7 "Plan" means The Ohio Casualty Insurance Company Benefit Equalization
Plan as from time to time in effect.
1.8 "Retirement Plan" means the Employees Retirement Plan of The Ohio
Casualty Insurance Company.
1.9 "Supplemental Benefit" means the excess, if any, of (i) the
retirement benefit that would have been payable to or with respect
to a participant at his benefit commencement date under the
Retirement Plan had the limitations on benefits imposed by Section
14 of the Retirement Plan not been applicable and the participant's
Compensation under the Retirement Plan been inclusive of amounts
which are disregarded by reason of exceeding the compensation limit
referred to in subsection 1.7 of the Retirement Plan (as adjusted in
accordance with Section 401(a)(17) of the Internal Revenue Code), over
(ii) the sum of (a) the retirement benefit payable to or with respect
to the participant at his benefit commencement date under the
Retirement Plan and (b) any Excess Benefit payable under this Plan.
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SECTION TWO
Participation
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Participation in the Plan shall be limited to those participants in the
Retirement Plan who, as a result of the limitations on benefits that may be
paid or accrued under the Retirement Plan by reason of Section 415 of the
Internal Revenue Code and the limitation on compensation which may be taken
into account under the Retirement Plan by reason of Section 401(a)(17) of
such Code, receive or will receive a lesser amount of retirement income
under the Retirement Plan than otherwise would be paid or payable in the
absence of such limitations, and the Beneficiaries of such participants.
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SECTION THREE
Excess and Supplemental Benefits
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3.1 Excess Benefits
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Except as is otherwise provided in Section 3.3, the Actuarial
Equivalent Present Value of the aggregate amount of Excess Benefit
payable to or with respect to a participant shall be paid directly
to such participant, or to his Beneficiary, as applicable, from the
general assets of the Company in accordance with Section 3.4.
3.2 Supplemental Benefits
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Except as is otherwise provided in Section 3.3, the Actuarial
Equivalent Present Value of the aggregate amount of Supplemental
Benefit payable to or with respect to a participant shall be paid to
such participant, or to his Beneficiary, as applicable, from the
general assets of the Company in accordance with Section 3.4.
3.3 Irrevocable Election to have Benefits Paid as an Annuity
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Any other provision of the Plan to the contrary notwithstanding,
subject to such uniform and nondiscriminatory rules as the Committee
shall from time to time adopt, a participant shall be entitled to
make an irrevocable election (within such period of time prior to
the date on which the participant terminates employment [whether by
retirement, death, or otherwise] as the Company shall from time to
time prescribe) to receive the Excess Benefit and/or Supplemental
Benefit to which he or she is entitled under this Plan in the same
form of distribution as the participant's benefits are payable under
the Retirement Plan provided that such irrevocable election is made
before such Excess Benefit and/or Supplemental Benefit is
ascertainable and readily available.
3.4 General Provisions
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(a) The Company shall not make any provision for, or arrange
for, the advance funding of any Excess Benefits or
Supplemental Benefits payable hereunder (or, if applicable,
the Actuarial Equivalent Present Value thereof) that would
cause any such Benefits to be "funded" (i.e., taxable prior
to actual receipt) for federal income tax purposes.
(b) No portion of any Excess Benefit or Supplemental Benefit
payable hereunder (or, if applicable, the Actuarial
Equivalent Present Value thereof), shall be deemed to be an
asset of this Plan; at all times, any funds used to pay
benefits under the Plan shall be derived from the general
assets of the Company, subject to claims of the Company's
creditors.
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(c) Subject to the provisions of Section 3.3, the Actuarial
Equivalent Present Value of the Excess Benefit and/or
Supplemental Benefit payable hereunder shall be paid in a
lump sum cash distribution contemporaneously with (or as
soon as practicable thereafter) the date on which the
participant terminates employment (whether by retirement,
death, or otherwise).
(d) To the extent that any supplemental retirement benefits are
payable to a participant under an employment or other
agreement between the participant and the Company, the
benefits otherwise payable hereunder shall be reduced by the
Actuarial Equivalent Present Value of such payments.
(e) In the event that the Retirement Plan shall be terminated,
accrual and payment of benefits under the Plan shall cease,
unless the Company shall otherwise specifically provide by
action of its Board of Directors at the time of termination
of the Retirement Plan or at a later date.
June 2002
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SECTION FOUR
Administration
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4.1 Plan Administrator
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The Ohio Casualty Insurance Company shall be the "administrator" of
the Plan within the meaning of ERISA.
4.2 Retirement Committee
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Subject to the provisions of Section 4.1, the Committee of the
Retirement Plan shall be vested with the general administration of
the Plan. The Committee shall have the exclusive right to interpret
the Plan. The decisions, actions and records of the Committee shall
be conclusive and binding upon the Company and all persons having or
claiming to have any right or interest in or under the Plan.
June 2002
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SECTION FIVE
Amendment and Termination
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5.1 Amendment of the Plan
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Subject to the provisions of Section 5.3, the Plan may be wholly or
partially amended or otherwise modified at any time by the Board of
Directors.
5.2 Termination of the Plan
-----------------------
Subject to the provisions of Section 5.3, the Plan may be terminated
at any time by the Board of Directors.
5.3 No Impairment of Benefits
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Notwithstanding the provisions of Section 5.1 and 5.2, no amendment
to or termination of the Plan shall impair any rights to benefits
which have accrued hereunder, except as is otherwise provided in
Section 3.4(e).
5.4 Claims Procedure
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Any claims procedures outlined in the Retirement Plan shall apply
for purposes of administering claims under this Plan.
June 2002
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