HILB, ROGAL, AND HAMILTON COMPANY
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Amended and Restated
Effective January 1, 1998
HILB, ROGAL, AND HAMILTON COMPANY
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Table of Contents
Page
ARTICLE I
GENERAL
Section 1.1 Effective Date 1
Section 1.2 Purpose 1
ARTICLE II
DEFINITIONS AND USAGE
Section 2.1 Definitions 2
Section 2.2 Usage 6
ARTICLE III
ELIGIBILITY AND PARTICIPATION
Section 3.1 Eligibility and Participation 6
ARTICLE IV
SUPPLEMENTAL BENEFIT
Section 4.1 Entitlement to Benefits 7
Section 4.2 Supplemental Benefit 7
Section 4.3 Normal Form of Payment 8
Section 4.4 Time of Payment 9
Section 4.5 Segregation of Assets 9
Section 4.6 Forfeiture of Supplemental Benefit 9
ARTICLE V
DEATH AND DISABILITY BENEFITS
Section 5.1 Death Benefit 9
Section 5.2 Disability Benefit 10
ARTICLE VI
ADMINISTRATION
Section 6.1 General 10
Section 6.2 Administrative Rules 11
Section 6.3 Duties 11
Section 6.4 Fees 12
ARTICLE VII
CLAIMS PROCEDURE
Section 7.1 General 12
Section 7.2 Denials 12
Section 7.3 Notice 12
Section 7.4 Appeals Procedure 13
Section 7.5 Review 13
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1 Amendment 13
Section 8.2 Termination 14
Section 8.3 No Assignment 14
Section 8.4 Incapacity 15
Section 8.5 Successors and Assigns 15
Section 8.6 Governing Law 15
Section 8.7 No Guarantee of Employment 15
Section 8.8 Unfunded Plan 15
Section 8.9 Severability 16
Section 8.10 Notification of Addresses 16
Section 8.11 Bonding 16
HILB, ROGAL, AND HAMILTON COMPANY
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I
GENERAL
1.1 Effective Date. The provisions of the Plan shall be
effective as of December 16, 1994, and, as amended and restated,
effective January 1, 1998. The rights, if any, of any person
whose status as an employee of the Company and its subsidiaries
and affiliates, if any, has terminated shall be determined
pursuant to the Plan as in effect on the date such employee
terminated, unless subsequently adopted provisions of the Plan
are made specifically applicable to such person.
1.2 Purpose. The purpose of the Plan is to provide
supplemental retirement income to a Participant. The Plan is
intended to be (and shall be construed and administered as) an
"employee pension benefit plan" under the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA") which
is unfunded and maintained by the Company solely to provide
retirement income to a select group of management or highly
compensated employees as such group is described under sections
201(2), 301(a)(3), and 401(a)(1) of ERISA as interpreted by the
U.S. Department of Labor. The Plan is not intended to be a plan
described in section 401(a) of the Code or section 3(2)(A) of
ERISA.
ARTICLE II
DEFINITIONS AND USAGE
2.1 Definitions. Wherever used in the Plan, the following
words and phrases shall have the meanings set forth below unless
the context plainly requires a different meaning:
"Benefit Commencement Date" means the January 1
following a Participant's termination of employment
with the Company, or such earlier date in the absolute
discretion of the Committee.
"Board" means the Board of Directors of the
Company.
"Change of Control" means and shall be deemed to
have taken place if: (i) any individual, entity or
"group" (within the meaning of Sections 13(d)(3) or
14(d)(2) of the Exchange Act) becomes the beneficial
owner of shares of the Company having 25 percent or
more of the total number of votes that may be cast for
the election of directors of the Company, other than
(a) as a result of any acquisition directly from the
Company, or (b) as a result of any acquisition by any
employee benefit plans (or related trusts) sponsored or
maintained by the Company or its Subsidiaries; or (ii)
there is a change in the composition of the Board such
that the individuals who, as of January 1, 1998,
constitute the Board (the Board as of January 1, 1998
shall be hereinafter referred to as the "Incumbent
Board") cease for any reason to constitute at least a
majority of the Board; provided, however, for purposes
of this definition, that any individual who becomes a
member of the Board subsequent to January 1, 1998 whose
election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a
majority of those individuals who are members of the
Board and who were also members of the Incumbent Board
(or deemed to be such pursuant to this proviso) shall
be considered as though such individual were a member
of the Incumbent Board; but, provided further, that any
such individual whose initial assumption of office
occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act)
or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the
Board shall not be so considered as a member of the
Incumbent Board; or (iii) if at any time, (a) the
Company shall consolidate with, or merge with, any
other Person and the Company shall not be the
continuing or surviving corporation, (b) any Person
shall consolidate with, or merge with, the Company, and
the Company shall be the continuing or surviving
corporation and in connection therewith, all or part of
the outstanding Common Stock shall be changed into or
exchanged for stock or other securities of any other
Person or cash or any other property, (c) the Company
shall be a party to a statutory share exchange with any
other Person after which the Company is a Subsidiary of
any other Person, or (d) the Company shall sell or
otherwise transfer 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Committee" means the Compensation Committee of
the Board, if any, and otherwise, the Board.
"Company" means Hilb, Rogal, and Hamilton Company
and any successor thereto.
"Compensation" means total base compensation,
excluding bonuses and other forms of compensation, paid
to a Participant for personal services rendered to the
Company without regard to any Compensation Limitation.
"Compensation Limitation" means $150,000 as
adjusted to reflect cost-of-living increases by the
Secretary of the Treasury or his delegate from time to
time under section 401(a)(17) of the Code.
"Eligible Employee" means an employee of the
Company whose Compensation exceeds $150,000 as adjusted
from time to time under section 401(a)(17) of the Code.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"Grandfathered Participant" means a Participant
who is designated by the Committee as a "grandfathered
participant."
"Participant" means an Eligible Employee who is
participating in the Plan in accordance with Section
3.1 hereof and shall include a Grandfathered
Participant, unless otherwise specified.
"Plan" means the Hilb, Rogal, and Hamilton Company
Supplemental Executive Retirement Plan.
"Plan Year" means the calendar year.
"Pre-1998 Accrued Benefit" means the value of the
benefit for each Participant in the Plan who was not in
pay status (receiving benefits) as of December 31, 1997
determined in accordance with the terms of the Plan
then in effect as though the Participant had terminated
employment as of that date.
"Retirement Plan" means the Hilb, Rogal and
Hamilton Company Profit Sharing Savings Plan.
"Separation from Service" means a Participant's
termination from employment as described in the
Retirement Plan.
"Supplemental Benefit" means the benefit provided
in accordance with Section 4.2 of the Plan.
"Years of Service", for purposes of benefit
accrual and vesting, means a Participant's full years
of employment with the Company. Years of employment
with Insurance Management Corporation shall be credited
as Years of Service for purposes of vesting and benefit
accrual.
2.2 Usage. Except where otherwise indicated by the
context, any masculine terminology used herein shall also include
the feminine and vice versa, and the definition of any term
herein in the singular shall also include the plural and vice
versa.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Eligibility and Participation. The Committee shall
designate from time to time Eligible Employees of the Company who
shall participate in the Plan; provided, however, that such
Eligible Employees shall be members of a select group of
management or highly compensated employees as such group is
described under sections 201(2), 301(a)(3), and 401(a)(1) of
ERISA. The Eligible Employees of the Company so designated by
the Committee shall become Participants in the Plan.
ARTICLE IV
SUPPLEMENTAL BENEFIT
4.1 Entitlement to Benefits. Each Participant shall be
entitled to the vested portion of his Supplemental Benefit
provided in Section 4.2 of the Plan upon reaching his Benefit
Commencement Date. A Participant who terminates employment (for
any reason other than disability or death) shall have a vested
interest in his Supplemental Benefit, based upon the following
vesting schedule:
Years of Service Vesting Percentage
0-4 0%
5 33.33%
6-15 6.66% per year
Notwithstanding the foregoing, a Participant shall be fully
vested upon a Change of Control.
4.2 Supplemental Benefit. A Participant's Supplemental
Benefit shall be equal to his account balance under the Plan.
(a) Deemed Contributions to Account. Annually the
account of a Participant shall be credited (deemed to have been
contributed) with an amount that is calculated by determining the
total employer match and profit sharing contribution (as a
percentage of compensation) that the Participant would have
received under the Retirement Plan but without the Compensation
Limitation that applies to such Retirement Plan, reduced by the
amount of employer match and profit sharing contribution actually
contributed to the Retirement Plan by the Company.
(b) Account Adjustments. A deemed contribution to the
Participant's account shall be treated as having been invested in
one or more deemed investments designated by the Committee from
time to time. The value of a Participant's account shall be
adjusted at least annually to reflect increase or decrease in the
value of such deemed investments. In the absence of any
designation of one or more deemed investments, the Participant's
account shall be credited with interest at an annual rate
specified from time to time by the Committee.
(c) Exception for Grandfathered Participants.
Participants in the Plan as of December 31, 1997 shall be
regarded as Grandfathered Participants. Effective January 1,
1998, their accounts shall be administered as set forth above
except as follows:
(1) A Grandfathered Participant's
Pre-1998 Accrued Benefit shall be determined
and shall be the beginning amount in the
Participant's account as of January 1, 1998.
(2) Annually, the account of a
Grandfathered Participant shall be credited
with the greater of 2% of Compensation or the
amount determined in Paragraph (a) above.
4.3 Normal Form of Payment. The normal form of payment of
the Participant's Supplemental Benefit shall be five annual
installments with interest as determined by the Committee from
time to time.
4.4 Time of Payment.
(a) General Time of Payment. The actual payment of
the Supplemental Benefit shall commence on the Participant's
Benefit Commencement Date.
(b) Accelerated Payment of Benefits: Notwithstanding
anything herein to the contrary, in the sole discretion of the
Committee, payment of benefits under Article IV or V of the Plan
may be accelerated.
4.5 Segregation of Assets. The Company may, but shall not
be obligated, to segregate assets in trust or otherwise for the
purpose of paying obligations under this plan. Further, the
Company has no obligation to match with actual investment any
deemed contribution or deemed investment.
4.6 Forfeiture of Supplemental Benefit. Notwithstanding
anything in Article IV to the contrary, a Participant shall
forfeit the right to or interest in his Supplemental Benefit as
follows:
After a Participant has begun receiving payment of his
Supplemental Benefit, he shall forfeit all right to or interest
in any future payments if he enters into employment with a
competitor of the Company without the consent of the Company.
ARTICLE V
DEATH AND DISABILITY BENEFITS
5.1 Death Benefit. If a Participant dies while employed by
the Company before his Benefit Commencement Date, the surviving
spouse of the Participant shall be entitled to a death benefit
equal to the Participant's Supplemental Benefit determined as of
the Participant's date of death. A deceased Participant shall be
fully vested in his Supplemental Benefit as of his date of death.
If a Participant dies after retirement and after he has begun to
receive his benefits under the Plan, the death benefit shall be
equal to the principal of any of the Participant's remaining
payments.
The death benefit shall be paid to his designated
beneficiary, if any, in a lump sum within sixty (60) days of the
Participant's date of death or as soon thereafter as is
practicable. If no beneficiary is designated, the death benefit
shall be paid to his estate.
5.2 Disability Benefit. If a Participant becomes disabled,
as defined in the Retirement Plan, he shall become fully vested in
his Supplemental Benefit determined as of the date of his
separation from service as a result of disability.
ARTICLE VI
ADMINISTRATION
6.1 General. The Administrator shall be the Committee, or
such other person or persons as designated by the Committee.
Except as otherwise specifically provided in the Plan, the
Administrator shall be responsible for administration of the
Plan. The Administrator shall be the "named fiduciary" within
the meaning of Section 402(c)(2) of ERISA.
6.2 Administrative Rules. The Administrator may adopt such
rules of procedure as it deems desirable for the conduct of its
affairs, except to the extent that such rules conflict with the
provisions of the Plan.
6.3 Duties. The Administrator shall have the following
rights, powers and duties:
(a) The decision of the Administrator in matters
within its jurisdiction shall be final, binding and conclusive
upon the Company and upon any other person affected by such
decision, subject to the claims procedure hereinafter set forth.
(b) The Administrator shall have the duty and
authority to interpret and construe the provisions of the Plan,
to decide any question that may arise regarding the rights of
employees, Participants and beneficiaries, and the amounts of
their respective interests, to adopt such rules and to exercise
such powers as the Administrator may deem necessary for the
administration of the Plan, and to exercise any other rights,
powers or privileges granted to the Administrator by the terms of
the Plan.
(c) The Administrator shall maintain full and complete
records of its decisions. Its records shall contain all relevant
data pertaining to the Participant and his rights and duties
under the Plan. The Administrator shall have the duty to
maintain account records of all Participants.
(d) The Administrator shall cause the principal
provisions of the Plan to be communicated to the Participants,
and a copy of the Plan and other documents to be available at the
principal office of the Company for inspection by the
Participants at reasonable times determined by the Administrator.
(e) The Administrator shall periodically report to the
Committee with respect to the status of the Plan.
6.4 Fees. No fee or compensation shall be paid to any
person for services as the Administrator.
ARTICLE VII
CLAIMS PROCEDURE
7.1 General. Any claim for benefits under the Plan shall
be filed by the Participant or surviving spouse ("claimant") on
the form prescribed for such purpose with the Administrator.
7.2 Denials. If a claim for benefits under the Plan is
wholly or partially denied, notice of the decision shall be
furnished to the claimant by the Administrator within a
reasonable period of time after receipt of the claim by the
Administrator.
7.3 Notice. Any claimant who is denied a claim for
benefits shall be furnished written notice setting forth:
(a) the specific reason or reasons for the denial;
(b) specific reference to the pertinent provision of
the Plan upon which the denial is based;
(c) a description of any additional material or
information necessary for the claimant to perfect the claim; and
(d) an explanation of the claim review procedure under
the Plan.
7.4 Appeals Procedure. In order that a claimant may appeal
a denial of a claim, the claimant or the claimant's duly
authorized representative may:
(a) request a review by written application to the
Administrator, or its designate, no later than sixty (60) days
after receipt by the claimant of written notification of denial
of a claim;
(b) review pertinent documents; and
(c) submit issues and comments in writing.
7.5 Review. A decision on review of a denied claim shall
be made not later than sixty (60) days after receipt of a request
for review, unless special circumstances require an extension of
time for processing, in which case a decision shall be rendered
within a reasonable period of time, but not later than one
hundred and twenty (120) days after receipt of a request for
review. The decision on review shall be in writing and shall
include the specific reason(s) for the decision and the specific
reference(s) to the pertinent provisions of the Plan on which the
decision is based.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1 Amendment. The Company reserves the right to amend the
Plan in any manner that it deems advisable by a resolution of the
Board, which shall be communicated to Participants not later than
sixty (60) days following the effective date of such amendment.
No amendment shall, without the Participant's consent, affect the
amount of the Participant's Supplemental Benefit at the time the
amendment becomes effective or the right of the Participant to
receive a Retirement Benefit after the Participant has met the
entitlement requirements provided in Section 4.1 of the Plan.
8.2 Termination. The Company reserves the right to
terminate the Plan at any time by resolution of the Board, which
shall be communicated to Participant not later than sixty (60)
days following the effective date of such amendment. No
termination shall, without the consent of the Participant, affect
the amount of the Participant's Supplemental Benefit prior to the
termination of the right of the Participant to receive a
Supplemental Benefit after the Participant has met the
entitlement requirements provided in Section 4.1 of the Plan.
8.3 No Assignment. The Participant shall not have the
power to pledge, transfer, assign, anticipate, mortgage or
otherwise encumber or dispose of in advance any interest in
amounts payable hereunder or any of the payments provided for
herein, no shall any interest in amounts payable hereunder or in
any payments be subject to seizure for payment of any debts,
judgments, alimony or separate maintenance, or be reached or
transferred by operation of law in the event of bankruptcy,
insolvency or otherwise.
8.4 Incapacity. If the Administrator determines that any
person to whom such benefit is payable is incompetent by reason
of physical or mental disability, the Administrator may cause the
payments becoming due to such person to be made to another for
his benefit. Payments made pursuant to this Section shall, as to
such payment, operate as a complete discharge of the Plan, each
Company, the Committee and the Administrator.
8.5 Successors and Assigns. The provisions of the Plan are
binding upon and inure to the benefit of each Company, its
respective successors and assigns, and the Participant and his
beneficiaries, heirs, legal representatives, and assigns.
8.6 Governing Law. The Plan shall be subject to and
construed in accordance with the laws of the Commonwealth of
Virginia to the extent not preempted by the provisions of ERISA.
8.7 No Guarantee of Employment. Nothing contained in the
Plan shall be construed as a contract of employment or deemed to
give any Participant the right to be retained in the employ of
the Company or to give any Participant any equity or other
interest in the assets, business, or affairs of the Company. No
Participant hereunder shall have a security interest in assets of
any Company used to make contributions or pay benefits.
8.8 Unfunded Plan. The obligation of the Company to make
payments under this Plan constitutes nothing more than an
unsecured promise of the Company to make such payments, and any
property of the Company that may be set aside in a trust or
otherwise for the payment of benefits under this Plan shall, in
the event of the Company's bankruptcy or insolvency, remain
subject to the claims of the Company's general creditors until
such benefits are distributed in accordance with Article IV
hereof.
8.9 Severability. If any provision of the Plan shall be
held illegal or invalid for any reason, such illegality or
invalidity shall not affect the remaining provisions of the Plan,
but the Plan shall be construed and enforced as if such illegal
or invalid provision had never been included herein.
8.10 Notification of Addresses. Each Participant shall file
with the Administrator, from time to time, in writing, the post
office address of the Participant, the post office address of
each Beneficiary, and each change of post office address. Any
communication, statement or notice addressed to the last post
office address filed with the Administrator (or if no such
address was filed with the Administrator, then to the last post
office address of the Participant or beneficiary as shown on the
Company's records) shall be binding on the Participant and each
beneficiary for all purposes of the Plan and neither the
Administrator nor any Company shall be obliged to search for or
ascertain the whereabouts of any Participant or beneficiary.
8.11 Bonding. The Administrator and all agents and advisors
employed by it shall not be required to be bonded, except as
otherwise required by ERISA.
IN WITNESS WHEREOF, the Company has caused this Plan to be
executed by its duly authorized officer.
HILB, ROGAL & HAMILTON COMPANY
By_/s/Andrew L. Rogal
0401639.02