EXHIBIT 10.1.5
January 23, 1997
Mr. Richard D. Robinson
12 Evergreen Avenue
Westport, Connecticut 06880
Dear Richard:
This letter confirms our and your understanding and
agreement on the terms under which your employment with Risk
Capital Holdings, Inc. and its affiliates (collectively the
"Company") will terminate.
1. Your last day of employment with the Company will be
January 31, 1997 (the "Termination Date").
2. You will be entitled to continue to receive your annual
base salary at the rate of $261,000 per annum, payable semimonthly,
for twelve months commencing on the Termination Date; provided,
however, that such payments shall be reduced by any compensation
received by you in connection with any other employment you may
obtain.
3. Medical and dental coverage will remain in effect for you
and your covered dependents for twelve months following the
Termination Date or until you secure alternate employment, if earlier.
Such coverage shall be provided on the same basis as provided to
active employees of the Company in accordance with the terms and
provisions of each applicable plan as in effect from time to time,
including any contribution required to be made by you toward such
coverage.
4. The 25,000 shares of restricted Common Stock of the
Company awarded to you as of April 30, 1996 under the Company's 1995
Long Term Incentive and Share Award Plan (the "Share Plan") shall
become immediately vested in full on the Termination Date.
5. The option to purchase 25,000 shares of Company Common
Stock granted to you as of April 30, 1996 pursuant to the Share Plan
shall become exercisable in full on the Termination Date, and such
option shall be exercisable for seven years from the date it first
became exercisable. The terms of such stock option are set forth in
the attached Stock Option Agreement.
6. Except as set forth in paragraph 3 above, you will cease
participation in all employee benefit plans and arrangements of the
Company as of the Termination Date. Your rights with respect to your
accrued benefits as of the Termination Date under the Risk Capital
Reinsurance Company Savings Plan, the Risk Capital Reinsurance Company
Pension Plan, the Risk Capital Reinsurance Company Executive
Supplemental Non-Qualified Savings and Retirement Plan and the Risk
Capital Holdings, Inc. 1995 Employee Stock Purchase Plan are as set
forth in the applicable plan document. Other than as expressly set
forth in this letter agreement, you will have no continuing rights
under any employee benefit plan or arrangement of the Company
following the Termination Date.
7. The amounts payable hereunder shall be subject to
applicable withholding taxes, and you will be required to make
arrangements satisfactory to the Company in order to satisfy all
applicable withholding tax obligations arising out of the vesting of
restricted shares under paragraph 4 above and the exercise of the
stock option described in paragraph 5 above.
8. You agree to hold all Proprietary Information in
confidence and not to, directly or indirectly, disclose, use, copy,
publish, summarize or remove from the Company premises any Proprietary
Information. You will as soon as possible after the Termination Date
(but in any event no later than ten days after the Termination Date)
return to the Company all Proprietary Information and related reports,
files, memoranda, and records; credit cards, card key passes; door and
file keys; computer access codes; software, and other physical and
personal property which you received or prepared or helped prepare in
connection with your employment and which are in your possession or
control, and you will not retain any copies, duplicates, reproductions
or excepts thereof. As used in this paragraph, "Proprietary
Information" means any information in whatever form, tangible or
intangible, directly related to the business of the Company unless the
information is publicly available through lawful means.
9. You understand and agree that you will not, directly or
indirectly, divulge to any person or use for your own benefit or the
benefit of any person any information of a private, secret or
confidential nature concerning the business, accounts or finances of
the Company or any of the secrets, dealings, transactions or affairs
including mergers, acquisitions, divestitures, joint ventures,
partnership or equity participations, investors, reinsurance terms or
any business plans of the Company or of any customer or client of the
Company which have come into your knowledge during the course of your
employment with the Company. Without prejudice to the generality of
this clause, confidential information includes any and all data,
plans, specifications, drawings, documents, com-
puter software and other information belonging to or owned or developed by and
unique to the Company.
10. In consideration for the Company's agreement to execute
and deliver to you the Release and Waiver attached hereto as Exhibit A
and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, you agree to execute and
deliver to the Company the Release and Waiver attached hereto as
Exhibit B on the date you execute this letter agreement below.
11. You acknowledge that the terms of this letter agreement are
contractual and not a mere recital and that there are no agreements,
understandings or representations made by the Company except as
expressly stated in this letter agreement and the attachments hereto.
Please indicate your agreement and acceptance of these provisions
by signing and dating the enclosed copy of this letter agreement, the
Stock Option Agreement attached hereto and the Release and Waiver
attached as Exhibit B and returning them to the Company.
Sincerely,
RISK CAPITAL HOLDINGS, INC.
By: /s/ Mark D. Mosca
--------------------------------
Name: Mark D. Mosca
Title: President
Agreed and Accepted RISK CAPITAL REINSURANCE COMPANY
/s/ Richard D. Robinson
- ------------------------
Richard D. Robinson By: /s/ Mark D. Mosca
-------------------
Name: Mark D. Mosca
Title: President and Chief
Executive Officer
Date: 1/23/97
Exhibit 10.10.2
FIRST AMENDMENT TO
RISK CAPITAL HOLDINGS, INC.
1995 LONG TERM INCENTIVE AND SHARE AWARD PLAN
The Risk Capital Holdings, Inc. 1995 Long Term Incentive and Share
Award Plan is amended as follows, effective September 16, 1996; provided,
however, that paragraph 2 of this amendment shall be contingent upon approval by
the affirmative vote of the holders of a majority of voting securities of Risk
Capital Holdings, Inc. at a meeting duly held during calendar year 1997.
1. Section 2(g) is amended to read as follows:
"(g) `Committee' means the Compensation Committee of the
Board, or such other Board committee (or the entire Board) as may be
designated by the Board to administer the Plan."
2. Section 2(l) is amended to read as follows:
"(l) `Eligible Employee' means (i) an employee of the Company
or its Subsidiaries and Affiliates, including any director who is an
employee, who is responsible for or contributes to the management,
growth and/or profitability of the business of the Company, its
Subsidiaries or Affiliates, and (ii) any Director."
3. Section 3(b) is amended by adding the following at the end
thereof:
"Notwithstanding any provision of this Plan to the contrary, the
Committee may grant Awards which are subject to the approval of the
Board; provided that an Award shall be subject to Board approval only
if the Committee expressly so states."
4. Section 6(a) is amended by adding the following at the end
thereof:
"Notwithstanding the foregoing, the exercise price of any Option, grant
price of any SAR or purchase price of any other Award conferring a
right to purchase Shares which is granted in exchange or substitution
for an option, SAR or other award granted by the Company (other than in
connection with a transaction described in Section 4(c) hereof) shall
not be less than the exercise price, grant price or purchase price of
the exchanged or substituted option, SAR or other award, and
outstanding Awards shall not be amended (other than in connection with
a transaction described in Section 4(c) hereof) to reduce the exercise
price, grant price or purchase price of any such Award."
5. Section 6(d) is amended by deleting the first sentence thereof and
replacing it with the following:
"Except as set forth below and except for vested Shares,
Awards shall not be transferable by an Eligible Employee
except by will or the laws of descent and distribution (except
pursuant to a Beneficiary designation) and shall be exercisable during
the lifetime of an Eligible Employee only by such Eligible Employee or
his guardian or legal representative. Notwithstanding the foregoing, if
the Committee expressly so provides in the applicable Award agreement
(at the time of grant or at any time thereafter), an Award (other than
an ISO) granted hereunder may be transferred by a Participant to
members of his or her `immediate family' or to a trust established for
the exclusive benefit of solely one or more members of the
Participant's `immediate family,' and any such transfer by a
Participant other than a Director must be for no consideration. Any
Award held by the transferee will continue to be subject to the same
terms and conditions that were applicable to the Award immediately
prior to the transfer, except that the Award will be transferable by
the transferee only by will or the laws of descent and distribution.
For purposes hereof, `immediate family' means the Participant's
children, stepchildren, grandchildren, parents, stepparents,
grandparents, spouse, siblings (including half brothers and sisters),
in-laws, and relationships arising because of legal adoption."
6. Section 7(f) is amended by adding the following at the end thereof:
"Notwithstanding the foregoing, if the Committee expressly so provides
in the applicable Award agreement (at the time of grant or at any time
thereafter), a Director's Option granted hereunder may be transferred
by an optionee to members of his or her `immediate family' or to a
trust established for the exclusive benefit of solely one or more
members of his or her `immediate family.' Any Director's Option held by
the transferee will continue to be subject to the same terms and
conditions that were applicable to the Director's Option immediately
prior to the transfer, except that the Director's Option will be
transferable by the transferee only by will or the laws of descent and
distribution. For purposes hereof, `immediate family' means the
Director's children, stepchildren, grandchildren, parents, stepparents,
grandparents, spouse, siblings (including half brothers and sisters),
in-laws, and relationships arising because of legal adoption."
7. Section 8(d) is amended by deleting the last sentence thereof.
* * * * *
-2-
EXHIBIT 10.10.3
N.-EMPL. DIR. STOCK OPT. AGREE'S/INIT. OPT. GRANTS
NON-EMPLOYEE DIRECTOR STOCK OPTION
AGREEMENTS--INITIAL OPTION GRANTS
Stock Option Agreements that are substantially identical in all
material respects to the agreement, dated as of September 19, 1995, between Risk
Capital Holdings, Inc. ("RCHI") and Michael P. Esposito, Jr., a copy of which is
being filed herewith in this Exhibit 10.10.3, have been entered into by RCHI and
each of the following Non-Employee Directors of RCHI (unless otherwise
indicated, (i) the date of each agreement, and the date exercisability
commences, is September 19, 1995, (ii) the exercise price is $20.00 and
(iii) the term of the option continues through September 19, 2005):
Robert Clements
Allan W. Fulkerson
Lewis L. Glucksman (date: November 14, 1995; exercise price: $20.9375;
term: through November 14, 2005)
Ian R. Heap
Thomas V. A. Kelsey (date: September 16, 1996; exercise price: $17.1875;
term: through September 19, 2006)
Philip L. Wroughton
* * * *
5
RISK CAPITAL HOLDINGS, INC.
Director Option Agreement
FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is
hereby acknowledged, Risk Capital Holdings, Inc. (the "Company"), a Delaware
corporation, hereby grants to Michael P. Esposito, Jr., a director of the
Company on the date hereof (the "Option Holder"), the option to purchase common
stock, $.01 par value per share, of the Company ("Shares"), upon the following
terms:
WHEREAS, the following terms reflect the Company's 1995 Long
Term Incentive and Share Award Plan, as amended by the First Amendment thereto
(the "Plan");
(a) Grant. The Option Holder is hereby automatically granted
an option (the "Option") to purchase 300 Shares (the "Option Shares") pursuant
to the Plan, the terms of which are incorporated herein by reference. The Option
is granted as of September 19, 1995 (the "Date of Grant") and such grant is
subject to the terms and conditions herein and the terms and conditions of the
applicable provisions of the Plan. Such Option shall not be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended.
(b) Status of Option Shares. The Option Shares shall upon
issue rank equally in all respects with the other Shares.
(c) Option Price. The purchase price for the Option Shares
shall be, except as herein provided, $20.00 per Option Share, hereinafter
sometimes referred to as the "Option Price," payable immediately in full upon
the exercise of the Option.
(d) Term of Option. The Option may be exercised only during
the period (the "Option Period") commencing in accordance with paragraph (f)
hereof and shall continue until September 19, 2005; thereafter the Option Holder
shall cease to have any rights in respect thereof. The right to exercise the
Option is subject to sooner termination as provided in paragraph (j) below.
(e) No Rights of Shareholder. The Option Holder shall not, by
virtue hereof, be entitled to any rights of a shareholder in the Company, either
at law or in equity.
(f) Exercisability. The Option shall become exercisable in
three equal installments, commencing on September 19, 1995 and thereafter on the
first and second anniversary thereof, subject to paragraph (j) below. The Option
may be exercised at any time or from time to time during the Option Period in
regard to all or any portion of the Option which are then exercisable, as may be
adjusted pursuant to paragraph (g) below.
(g) Adjustments for Recapitalization and Dividends. In the
event that, prior to the expiration of the Option, any dividend in Shares,
recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
such change affects the Shares such that they are increased or decreased or
changed into or exchanged for a different number or kind of shares, other
securities of the Company or of another corporation or other consideration, then
in order to maintain the proportionate interest of the Option Holder and
preserve the value of the Option, (i) there shall automatically be substituted
for each Share subject to the unexercised Option the number and kind of shares,
other securities or other consideration into which each outstanding
6
Share shall be changed or for which each such Share shall be exchanged, and (ii)
the exercise price shall be increased or decreased proportionately so that the
aggregate purchase price for the Shares subject to the unexercised Option shall
remain the same as immediately prior to such event.
(h) Transferability. The Option may not be assigned or
otherwise transferred, disposed of or encumbered by the Option Holder, other
than by will or by the laws of descent and distribution. During the lifetime of
the Option Holder, the Option shall be exercisable only by the Option Holder or
by his or her guardian or legal representative. Notwithstanding the foregoing,
the Option may be transferred by the Option Holder to members of his or her
"immediate family" or to a trust established for the exclusive benefit of solely
one or more members of the Option Holder's "immediate family." Any Option held
by the transferee will continue to be subject to the same terms and conditions
that were applicable to the Option immediately prior to the transfer, except
that the Option will be transferable by the transferee only by will or the laws
of descent and distribution. For purposes hereof, "immediate family" means the
Option Holder's children, stepchildren, grandchildren, parents, stepparents,
grandparents, spouse, siblings (including half brothers and sisters), in-laws,
and relationships arising because of legal adoption.
(i) Exercise of Option. In order to exercise the Option, the
Option Holder shall submit to the Company an instrument in writing signed by the
Option Holder, specifying the number of Option Shares in respect of which the
Option is being exercised, accompanied by payment of the Option Price for the
Option Shares for which the Option is being exercised in cash or Shares already
owned by the Option Holder (provided that the Option Holder has owned such
Shares for a minimum period of six months) and having a total Fair Market Value
(as defined below) equal to the exercise price, or in a combination of cash and
such Shares. Option Shares will be issued accordingly by the Company within
fifteen business days, and a share certificate dispatched to the Option Holder
within thirty days.
The Company shall not be required to issue fractional Shares
upon the exercise of the Option. If any fractional interest in a Share would be
deliverable upon the exercise of the Option in whole or in part but for the
provisions of this paragraph, the Company, in lieu of delivering any such
fractional share therefor, shall pay a cash adjustment therefor in an amount
equal to their Fair Market Value (or if any Shares are not publicly traded, an
amount equal to the book value per share at the end of the most recent fiscal
quarter) multiplied by the fraction of the fractional share which would
otherwise have been issued hereunder. Anything to the contrary herein
notwithstanding, the Company shall not be obligated to issue any Option Shares
hereunder if the issuance of such Option Shares would violate the provision of
any applicable law, in which event the Company shall, as soon as practicable,
take whatever action it reasonably can so that such Option Shares may be issued
without resulting in such violations of law. For purposes hereof, Fair Market
Value shall mean the mean between the high and low selling prices per Share on
the immediately preceding date (or, if the Shares were not traded on that day,
the next preceding day that the Shares were traded) on the principal exchange on
which the Shares are traded, as such prices are officially quoted on such
exchange.
(j) Termination of Service. In the event the Option Holder
ceases to be a director of the Company, (i) due to retirement after attainment
of age 65 or (ii) due to death or disability, the Option, to the extent not
already exercisable in full, shall become immediately and fully exercisable at
the time of termination of service, and the Option may be exercised at any time
during the Option Period. If the Option Holder ceases to be a director of the
Company for any other reason, the portion of the Option which is not then
exercisable shall be cancelled on the date service terminates, and the portion
of the Option which is then exercisable may be exercised at any time within six
months after the date of such termination, but not later than termination of the
Option Period.
7
(k) Obligations as to Capital. The Company agrees that it will
at all times maintain authorized and unissued share capital sufficient to
fulfill all of its obligations under the Option.
(l) Transfer of Shares. The Option, the Option Shares, or any
interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or
transferred or disposed of in any other manner, in whole or in part, only in
compliance with the terms, conditions and restrictions as set forth in the
governing instruments of the Company, applicable United States federal and state
securities laws and the terms and conditions hereof. Each certificate for Option
Shares issued upon exercise of the Option, unless at the time of exercise such
Option Shares are registered under the Securities Act of 1933, as amended, shall
bear the following legend:
"The securities evidenced hereby have not been registered
under the Securities Act of 1933, as amended (the `Act'), and
may not be offered, sold or otherwise transferred except (i)
in compliance with the provisions of any applicable state
securities or `Blue Sky' laws and (ii) (A) pursuant to an
effective registration under the Act, (B) in compliance with
Rule 144 under the Act, (C) inside the United States to a
Qualified Institutional Buyer in compliance with Rule 144A
under the Act, (D) outside the United States in compliance
with Rule 904 of Regulation S under the Act or (E) inside the
United State to an institutional `accredited investor' as
defined in Rule 501(a)(1), (2), (3) or (7) under the Act in a
transaction which, in the opinion of counsel reasonably
satisfactory to the Company, qualifies as an exempt
transaction under the Act and the rules and regulations
promulgated thereunder."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend shall also bear such legend unless, in the
opinion of counsel for the Company, the securities represented thereby need no
longer be subject to the restrictions set forth therein. The provisions of this
paragraph (l) shall be binding upon all subsequent holders of certificates
bearing the above legend and all subsequent holders of the Option, if any.
(m) Expenses of Issuance of Option Shares. The issuance of
stock certificates upon the exercise of the Option in whole or in part, shall be
without charge to the Option Holder. The Company shall pay, and indemnify the
Option Holder from and against any issuance, stamp or documentary taxes (other
than transfer taxes) or charges imposed by any governmental body, agency or
official (other than income taxes) by reason of the exercise of the Option in
whole or in part or the resulting issuance of the Option Shares.
(n) Withholding. The Option Holder agrees to make appropriate
arrangements with the Company for satisfaction of any applicable tax withholding
requirements, or similar requirements, arising out of the Option.
(o) References. References herein to rights and obligations of
the Option Holder shall apply, where appropriate, to the Option Holder's legal
representative or estate without regard to whether specific reference to such
legal representative or estate is contained in a particular provision of this
Option.
8
(p) Settlement of Disputes. Any dispute between the parties
arising from or relating to the terms of this Option shall be resolved by
arbitration held in the State of Connecticut in accordance with the rules of the
American Arbitration Association. All costs associated with any arbitration,
including all legal expenses, for both parties shall be borne by the Company.
(q) Notices. Any notice required or permitted to be given
under this agreement shall be in writing and shall be deemed to have been given
when delivered personally or by courier, or sent by certified or registered
mail, postage prepaid, return receipt requested, duly addressed to the party
concerned at the address indicated below or to such changed address as such
party may subsequently by similar process give notice of:
If to the Company:
Risk Capital Holdings, Inc.
20 Horseneck Lane
Greenwich, CT 06830
Attn: Secretary
If to the Option Holder:
550 Prospect Avenue
Oradell, NJ 07649
(r) Governing Law. This Option shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to principles of conflict of laws.
(s) Entire Agreement. This agreement constitutes the entire
contract among the parties relating to the subject matter hereof, and any
previous agreement or understanding among the parties with respect thereto is
superseded by this agreement.
(t) Counterparts. This agreement may be executed in two
counterparts, each of which shall constitute one and the same instrument.
9
IN WITNESS WHEREOF, the parties hereto have duly caused this
agreement to be signed as of the Date of Grant.
RISK CAPITAL HOLDINGS, INC.
By: /s/ Peter A. Appel
---------------------------------------
Peter A. Appel
Managing Director, General Counsel
and Secretary
/s/ Michael P. Esposito, Jr.
---------------------------------------
Michael P. Esposito, Jr.
10
EXHIBIT 10.10.4
N-EMPL. DIR. STOCK OPT. AGREE.S/ANN. OPT. GRANTS
NON-EMPLOYEE DIRECTOR STOCK OPTION
AGREEMENTS--ANNUAL OPTION GRANTS
Stock Option Agreements that are substantially identical in all
material respects to the agreements, dated as of January 1, 1996 ("1996
Agreement") and January 1, 1997 ("1997 Agreement"), respectively, between Risk
Capital Holdings, Inc. ("RCHI") and Michael P. Esposito, Jr., copies of which
are being filed herewith in this Exhibit 10.10.4, have been entered into by RCHI
and each of the following Non-Employee Directors of RCHI (unless otherwise
indicated, the number of Option Shares (as defined in the agreements) under each
agreement is 250 and each Non-Employee Director has entered into both the 1996
and 1997 Agreements):
Robert Clements
Allan W. Fulkerson
Lewis L. Glucksman
Ian R. Heap
Thomas V. A. Kelsey (1997 Agreement only)
Mark N. Williamson (Option Shares under 1996 Agreement: 146)
Philip L. Wroughton
* * * *
11
RISK CAPITAL HOLDINGS, INC.
Director Option Agreement
FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is
hereby acknowledged, Risk Capital Holdings, Inc. (the "Company"), a Delaware
corporation, hereby grants to Michael P. Esposito, Jr., a director of the
Company on the date hereof (the "Option Holder"), the option to purchase common
stock, $.01 par value per share, of the Company ("Shares"), upon the following
terms:
WHEREAS, the following terms reflect the Company's 1995 Long
Term Incentive and Share Award Plan, as amended by the First Amendment thereto
(the "Plan");
(a) Grant. The Option Holder is hereby automatically granted
an option (the "Option") to purchase 250 Shares (the "Option Shares") pursuant
to the Plan, the terms of which are incorporated herein by reference. The Option
is granted as of January 1, 1996 (the "Date of Grant") and such grant is subject
to the terms and conditions herein and the terms and conditions of the
applicable provisions of the Plan. Such Option shall not be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended.
(b) Status of Option Shares. The Option Shares shall upon
issue rank equally in all respects with the other Shares.
(c) Option Price. The purchase price for the Option Shares
shall be, except as herein provided, $22.00 per Option Share, hereinafter
sometimes referred to as the "Option Price," payable immediately in full upon
the exercise of the Option.
(d) Term of Option. The Option may be exercised only during
the period (the "Option Period") commencing in accordance with paragraph (f)
hereof and shall continue until January 1, 2006; thereafter the Option Holder
shall cease to have any rights in respect thereof. The right to exercise the
Option is subject to sooner termination as provided in paragraph (j) below.
(e) No Rights of Shareholder. The Option Holder shall not, by
virtue hereof, be entitled to any rights of a shareholder in the Company, either
at law or in equity.
(f) Exercisability. The Option shall become exercisable on
January 1, 1997, subject to paragraph (j) below. The Option may be exercised at
any time or from time to time during the Option Period in regard to all or any
portion of the Option which are then exercisable, as may be adjusted pursuant to
paragraph (g) below.
(g) Adjustments for Recapitalization and Dividends. In the
event that, prior to the expiration of the Option, any dividend in Shares,
recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
such change affects the Shares such that they are increased or decreased or
changed into or exchanged for a different number or kind of shares, other
securities of the Company or of another corporation or other consideration, then
in order to maintain the proportionate interest of the Option Holder and
preserve the value of the Option, (i) there shall automatically be substituted
for each Share subject to the unexercised Option the number and kind of shares,
other securities or other consideration into which each outstanding Share shall
be changed or for which each such Share shall be exchanged, and (ii) the
exercise price shall
12
be increased or decreased proportionately so that the aggregate purchase price
for the Shares subject to the unexercised Option shall remain the same as
immediately prior to such event.
(h) Transferability. The Option may not be assigned or
otherwise transferred, disposed of or encumbered by the Option Holder, other
than by will or by the laws of descent and distribution. During the lifetime of
the Option Holder, the Option shall be exercisable only by the Option Holder or
by his or her guardian or legal representative. Notwithstanding the foregoing,
the Option may be transferred by the Option Holder to members of his or her
"immediate family" or to a trust established for the exclusive benefit of solely
one or more members of the Option Holder's "immediate family." Any Option held
by the transferee will continue to be subject to the same terms and conditions
that were applicable to the Option immediately prior to the transfer, except
that the Option will be transferable by the transferee only by will or the laws
of descent and distribution. For purposes hereof, "immediate family" means the
Option Holder's children, stepchildren, grandchildren, parents, stepparents,
grandparents, spouse, siblings (including half brothers and sisters), in-laws,
and relationships arising because of legal adoption.
(i) Exercise of Option. In order to exercise the Option, the
Option Holder shall submit to the Company an instrument in writing signed by the
Option Holder, specifying the number of Option Shares in respect of which the
Option is being exercised, accompanied by payment of the Option Price for the
Option Shares for which the Option is being exercised in cash or Shares already
owned by the Option Holder (provided that the Option Holder has owned such
Shares for a minimum period of six months) and having a total Fair Market Value
(as defined below) equal to the exercise price, or in a combination of cash and
such Shares. Option Shares will be issued accordingly by the Company within
fifteen business days, and a share certificate dispatched to the Option Holder
within thirty days.
The Company shall not be required to issue fractional Shares
upon the exercise of the Option. If any fractional interest in a Share would be
deliverable upon the exercise of the Option in whole or in part but for the
provisions of this paragraph, the Company, in lieu of delivering any such
fractional share therefor, shall pay a cash adjustment therefor in an amount
equal to their Fair Market Value (or if any Shares are not publicly traded, an
amount equal to the book value per share at the end of the most recent fiscal
quarter) multiplied by the fraction of the fractional share which would
otherwise have been issued hereunder. Anything to the contrary herein
notwithstanding, the Company shall not be obligated to issue any Option Shares
hereunder if the issuance of such Option Shares would violate the provision of
any applicable law, in which event the Company shall, as soon as practicable,
take whatever action it reasonably can so that such Option Shares may be issued
without resulting in such violations of law. For purposes hereof, Fair Market
Value shall mean the mean between the high and low selling prices per Share on
the immediately preceding date (or, if the Shares were not traded on that day,
the next preceding day that the Shares were traded) on the principal exchange on
which the Shares are traded, as such prices are officially quoted on such
exchange.
(j) Termination of Service. In the event the Option Holder
ceases to be a director of the Company, (i) due to retirement after attainment
of age 65 or (ii) due to death or disability, the Option, to the extent not
already exercisable in full, shall become immediately and fully exercisable at
the time of termination of service, and the Option may be exercised at any time
during the Option Period. If the Option Holder ceases to be a director of the
Company for any other reason, the portion of the Option which is not then
exercisable shall be cancelled on the date service terminates, and the portion
of the Option which is then exercisable may be exercised at any time within six
months after the date of such termination, but not later than termination of the
Option Period.
13
(k) Obligations as to Capital. The Company agrees that it will
at all times maintain authorized and unissued share capital sufficient to
fulfill all of its obligations under the Option.
(l) Transfer of Shares. The Option, the Option Shares, or any
interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or
transferred or disposed of in any other manner, in whole or in part, only in
compliance with the terms, conditions and restrictions as set forth in the
governing instruments of the Company, applicable United States federal and state
securities laws and the terms and conditions hereof. Each certificate for Option
Shares issued upon exercise of the Option, unless at the time of exercise such
Option Shares are registered under the Securities Act of 1933, as amended, shall
bear the following legend:
"The securities evidenced hereby have not been registered
under the Securities Act of 1933, as amended (the `Act'), and
may not be offered, sold or otherwise transferred except (i)
in compliance with the provisions of any applicable state
securities or `Blue Sky' laws and (ii) (A) pursuant to an
effective registration under the Act, (B) in compliance with
Rule 144 under the Act, (C) inside the United States to a
Qualified Institutional Buyer in compliance with Rule 144A
under the Act, (D) outside the United States in compliance
with Rule 904 of Regulation S under the Act or (E) inside the
United State to an institutional `accredited investor' as
defined in Rule 501(a)(1), (2), (3) or (7) under the Act in a
transaction which, in the opinion of counsel reasonably
satisfactory to the Company, qualifies as an exempt
transaction under the Act and the rules and regulations
promulgated thereunder."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend shall also bear such legend unless, in the
opinion of counsel for the Company, the securities represented thereby need no
longer be subject to the restrictions set forth therein. The provisions of this
paragraph (l) shall be binding upon all subsequent holders of certificates
bearing the above legend and all subsequent holders of the Option, if any.
(m) Expenses of Issuance of Option Shares. The issuance of
stock certificates upon the exercise of the Option in whole or in part, shall be
without charge to the Option Holder. The Company shall pay, and indemnify the
Option Holder from and against any issuance, stamp or documentary taxes (other
than transfer taxes) or charges imposed by any governmental body, agency or
official (other than income taxes) by reason of the exercise of the Option in
whole or in part or the resulting issuance of the Option Shares.
(n) Withholding. The Option Holder agrees to make appropriate
arrangements with the Company for satisfaction of any applicable tax withholding
requirements, or similar requirements, arising out of the Option.
(o) References. References herein to rights and obligations of
the Option Holder shall apply, where appropriate, to the Option Holder's legal
representative or estate without regard to whether specific reference to such
legal representative or estate is contained in a particular provision of this
Option.
(p) Settlement of Disputes. Any dispute between the parties
arising from or relating to the terms of this Option shall be resolved by
arbitration held in the State of Connecticut in accordance
14
with the rules of the American Arbitration Association. All costs associated
with any arbitration, including all legal expenses, for both parties shall be
borne by the Company.
(q) Notices. Any notice required or permitted to be given
under this agreement shall be in writing and shall be deemed to have been given
when delivered personally or by courier, or sent by certified or registered
mail, postage prepaid, return receipt requested, duly addressed to the party
concerned at the address indicated below or to such changed address as such
party may subsequently by similar process give notice of:
If to the Company:
Risk Capital Holdings, Inc.
20 Horseneck Lane
Greenwich, CT 06830
Attn: Secretary
If to the Option Holder:
550 Prospect Avenue
Oradell, NJ 07649
(r) Governing Law. This Option shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to principles of conflict of laws.
(s) Entire Agreement. This agreement constitutes the entire
contract among the parties relating to the subject matter hereof, and any
previous agreement or understanding among the parties with respect thereto is
superseded by this agreement.
(t) Counterparts. This agreement may be executed in two
counterparts, each of which shall constitute one and the same instrument.
15
IN WITNESS WHEREOF, the parties hereto have duly caused this
agreement to be signed as of the Date of Grant.
RISK CAPITAL HOLDINGS, INC.
By: /s/ Peter A. Appel
----------------------------------------
Peter A. Appel
Managing Director, General Counsel
and Secretary
/s/ Michael P. Esposito, Jr.
----------------------------------------
Michael P. Esposito, Jr.
16
RISK CAPITAL HOLDINGS, INC.
Director Option Agreement
FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is
hereby acknowledged, Risk Capital Holdings, Inc. (the "Company"), a Delaware
corporation, hereby grants to Michael P. Esposito, Jr., a director of the
Company on the date hereof (the "Option Holder"), the option to purchase common
stock, $.01 par value per share, of the Company ("Shares"), upon the following
terms:
WHEREAS, the following terms reflect the Company's 1995 Long
Term Incentive and Share Award Plan, as amended by the First Amendment thereto
(the "Plan");
(a) Grant. The Option Holder is hereby automatically granted
an option (the "Option") to purchase 250 Shares (the "Option Shares") pursuant
to the Plan, the terms of which are incorporated herein by reference. The Option
is granted as of January 1, 1997 (the "Date of Grant") and such grant is subject
to the terms and conditions herein and the terms and conditions of the
applicable provisions of the Plan. Such Option shall not be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended.
(b) Status of Option Shares. The Option Shares shall upon
issue rank equally in all respects with the other Shares.
(c) Option Price. The purchase price for the Option Shares
shall be, except as herein provided, $19.625 per Option Share, hereinafter
sometimes referred to as the "Option Price," payable immediately in full upon
the exercise of the Option.
(d) Term of Option. The Option may be exercised only during
the period (the "Option Period") commencing in accordance with paragraph (f)
hereof and shall continue until January 1, 2007; thereafter the Option Holder
shall cease to have any rights in respect thereof. The right to exercise the
Option is subject to sooner termination as provided in paragraph (j) below.
(e) No Rights of Shareholder. The Option Holder shall not, by
virtue hereof, be entitled to any rights of a shareholder in the Company, either
at law or in equity.
(f) Exercisability. The Option shall become exercisable on
January 1, 1998, subject to paragraph (j) below. The Option may be exercised at
any time or from time to time during the Option Period in regard to all or any
portion of the Option which are then exercisable, as may be adjusted pursuant to
paragraph (g) below.
(g) Adjustments for Recapitalization and Dividends. In the
event that, prior to the expiration of the Option, any dividend in Shares,
recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
such change affects the Shares such that they are increased or decreased or
changed into or exchanged for a different number or kind of shares, other
securities of the Company or of another corporation or other consideration, then
in order to maintain the proportionate interest of the Option Holder and
preserve the value of the Option, (i) there shall automatically be substituted
for each Share subject to the unexercised Option the number and kind of shares,
other securities or other consideration into which each outstanding Share shall
be changed or for which each such Share shall be exchanged, and (ii) the
exercise price shall
17
be increased or decreased proportionately so that the aggregate purchase price
for the Shares subject to the unexercised Option shall remain the same as
immediately prior to such event.
(h) Transferability. The Option may not be assigned or
otherwise transferred, disposed of or encumbered by the Option Holder, other
than by will or by the laws of descent and distribution. During the lifetime of
the Option Holder, the Option shall be exercisable only by the Option Holder or
by his or her guardian or legal representative. Notwithstanding the foregoing,
the Option may be transferred by the Option Holder to members of his or her
"immediate family" or to a trust established for the exclusive benefit of solely
one or more members of the Option Holder's "immediate family." Any Option held
by the transferee will continue to be subject to the same terms and conditions
that were applicable to the Option immediately prior to the transfer, except
that the Option will be transferable by the transferee only by will or the laws
of descent and distribution. For purposes hereof, "immediate family" means the
Option Holder's children, stepchildren, grandchildren, parents, stepparents,
grandparents, spouse, siblings (including half brothers and sisters), in-laws,
and relationships arising because of legal adoption.
(i) Exercise of Option. In order to exercise the Option, the
Option Holder shall submit to the Company an instrument in writing signed by the
Option Holder, specifying the number of Option Shares in respect of which the
Option is being exercised, accompanied by payment of the Option Price for the
Option Shares for which the Option is being exercised in cash or Shares already
owned by the Option Holder (provided that the Option Holder has owned such
Shares for a minimum period of six months) and having a total Fair Market Value
(as defined below) equal to the exercise price, or in a combination of cash and
such Shares. Option Shares will be issued accordingly by the Company within
fifteen business days, and a share certificate dispatched to the Option Holder
within thirty days.
The Company shall not be required to issue fractional Shares
upon the exercise of the Option. If any fractional interest in a Share would be
deliverable upon the exercise of the Option in whole or in part but for the
provisions of this paragraph, the Company, in lieu of delivering any such
fractional share therefor, shall pay a cash adjustment therefor in an amount
equal to their Fair Market Value (or if any Shares are not publicly traded, an
amount equal to the book value per share at the end of the most recent fiscal
quarter) multiplied by the fraction of the fractional share which would
otherwise have been issued hereunder. Anything to the contrary herein
notwithstanding, the Company shall not be obligated to issue any Option Shares
hereunder if the issuance of such Option Shares would violate the provision of
any applicable law, in which event the Company shall, as soon as practicable,
take whatever action it reasonably can so that such Option Shares may be issued
without resulting in such violations of law. For purposes hereof, Fair Market
Value shall mean the mean between the high and low selling prices per Share on
the immediately preceding date (or, if the Shares were not traded on that day,
the next preceding day that the Shares were traded) on the principal exchange on
which the Shares are traded, as such prices are officially quoted on such
exchange.
(j) Termination of Service. In the event the Option Holder
ceases to be a director of the Company, (i) due to retirement after attainment
of age 65 or (ii) due to death or disability, the Option, to the extent not
already exercisable in full, shall become immediately and fully exercisable at
the time of termination of service, and the Option may be exercised at any time
during the Option Period. If the Option Holder ceases to be a director of the
Company for any other reason, the portion of the Option which is not then
exercisable shall be cancelled on the date service terminates, and the portion
of the Option which is then exercisable may be exercised at any time within six
months after the date of such termination, but not later than termination of the
Option Period.
18
(k) Obligations as to Capital. The Company agrees that it will
at all times maintain authorized and unissued share capital sufficient to
fulfill all of its obligations under the Option.
(l) Transfer of Shares. The Option, the Option Shares, or any
interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or
transferred or disposed of in any other manner, in whole or in part, only in
compliance with the terms, conditions and restrictions as set forth in the
governing instruments of the Company, applicable United States federal and state
securities laws and the terms and conditions hereof. Each certificate for Option
Shares issued upon exercise of the Option, unless at the time of exercise such
Option Shares are registered under the Securities Act of 1933, as amended, shall
bear the following legend:
"The securities evidenced hereby have not been registered
under the Securities Act of 1933, as amended (the `Act'), and
may not be offered, sold or otherwise transferred except (i)
in compliance with the provisions of any applicable state
securities or `Blue Sky' laws and (ii) (A) pursuant to an
effective registration under the Act, (B) in compliance with
Rule 144 under the Act, (C) inside the United States to a
Qualified Institutional Buyer in compliance with Rule 144A
under the Act, (D) outside the United States in compliance
with Rule 904 of Regulation S under the Act or (E) inside the
United State to an institutional `accredited investor' as
defined in Rule 501(a)(1), (2), (3) or (7) under the Act in a
transaction which, in the opinion of counsel reasonably
satisfactory to the Company, qualifies as an exempt
transaction under the Act and the rules and regulations
promulgated thereunder."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend shall also bear such legend unless, in the
opinion of counsel for the Company, the securities represented thereby need no
longer be subject to the restrictions set forth therein. The provisions of this
paragraph (l) shall be binding upon all subsequent holders of certificates
bearing the above legend and all subsequent holders of the Option, if any.
(m) Expenses of Issuance of Option Shares. The issuance of
stock certificates upon the exercise of the Option in whole or in part, shall be
without charge to the Option Holder. The Company shall pay, and indemnify the
Option Holder from and against any issuance, stamp or documentary taxes (other
than transfer taxes) or charges imposed by any governmental body, agency or
official (other than income taxes) by reason of the exercise of the Option in
whole or in part or the resulting issuance of the Option Shares.
(n) Withholding. The Option Holder agrees to make appropriate
arrangements with the Company for satisfaction of any applicable tax withholding
requirements, or similar requirements, arising out of the Option.
(o) References. References herein to rights and obligations of
the Option Holder shall apply, where appropriate, to the Option Holder's legal
representative or estate without regard to whether specific reference to such
legal representative or estate is contained in a particular provision of this
Option.
(p) Settlement of Disputes. Any dispute between the parties
arising from or relating to the terms of this Option shall be resolved by
arbitration held in the State of Connecticut in accordance
19
with the rules of the American Arbitration Association. All costs associated
with any arbitration, including all legal expenses, for both parties shall be
borne by the Company.
(q) Notices. Any notice required or permitted to be given
under this agreement shall be in writing and shall be deemed to have been given
when delivered personally or by courier, or sent by certified or registered
mail, postage prepaid, return receipt requested, duly addressed to the party
concerned at the address indicated below or to such changed address as such
party may subsequently by similar process give notice of:
If to the Company:
Risk Capital Holdings, Inc.
20 Horseneck Lane
Greenwich, CT 06830
Attn: Secretary
If to the Option Holder:
550 Prospect Avenue
Oradell, NJ 07649
(r) Governing Law. This Option shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to principles of conflict of laws.
(s) Entire Agreement. This agreement constitutes the entire
contract among the parties relating to the subject matter hereof, and any
previous agreement or understanding among the parties with respect thereto is
superseded by this agreement.
(t) Counterparts. This agreement may be executed in two
counterparts, each of which shall constitute one and the same instrument.
20
IN WITNESS WHEREOF, the parties hereto have duly caused this
agreement to be signed as of the Date of Grant.
RISK CAPITAL HOLDINGS, INC.
By: /s/ Peter A. Appel
----------------------------------------
Peter A. Appel
Managing Director, General Counsel
and Secretary
/s/ Michael P. Esposito, Jr.
----------------------------------------
Michael P. Esposito, Jr.
21
Exhibit 10.12.2
The CORPORATEplan for Retirement(SM)
(Money Purchase Pension Plan)
A Fidelity Prototype Plan
Non-Standardized Adoption Agreement 002
Basic Plan No. 09
ADOPTION AGREEMENT
ARTICLE 1
NON-STANDARDIZED MONEY PURCHASE PENSION PLAN
1.01 PLAN INFORMATION
(a) Name of Plan:
This is the Risk Capital Reinsurance Company Pension Plan (the
"Plan").
(b) Type of Plan: Money Purchase Pension Plan
(c) Name of Plan Administrator, if not the Employer:
Address:
Phone Number:
The Plan Administrator is the agent for service of
legal process for the Plan.
(d) Limitation Year (check one):
(1) /X/ Calendar Year
(2) / / Plan Year
(3) / / Other:
(e) Three Digit Plan Number: 002
(f) Plan Year End (month/day): 12/31
(g) Plan Status (check one):
(1) / / Effective Date of new Plan:
(2) /X/ Amendment Effective Date: 1/1/97 . This
is (check one):
/X/ (A) an amendment of The CORPORATEplan for
Retirement Adoption Agreement previously
executed by the Employer; or
/ / (B) a conversion from another plan document
into The CORPORATEplan for Retirement.
The original effective date of the Plan:
1/1/96
The substantive provisions of the Plan shall apply
prior to the Effective Date to the extent required
by the Tax Reform Act of 1986 or other applicable
laws.
1.02 EMPLOYER
(a) The Employer is: Risk Capital Reinsurance Company
Address: 20 Horseneck Lane
Greenwich, CT 06830
Contact's Name: Paul J. Malvasio
Telephone Number: (203) 862-4300
(1) Employer's Tax Identification Number: 06-1430254
(2) Business form of Employer (check one):
(A) /X/ Corporation (D) / / Governmental
(B) / / Sole proprietor or (E) / / Tax-exempt organization
partnership
(C) / / Subchapter S Corporation (F) / / Rural Electric
Cooperative
(3) Employer's fiscal year end: 12/31
(4) Date business commenced: 9/19/95
(b) The term "Employer" includes the following Related
Employer(s) (as defined in Section 2.01(a)(26)):
Not Applicable
2
1.03 COVERAGE
(a) All Employees who meet the conditions specified below
will be eligible to participate in the Plan:
(1) Service requirement (check one):
(A) / / no service requirement.
(B) /x/ three consecutive months of service (no
minimum number Hours of Service can be
required).
(C) / / six consecutive months of service (no minimum
number Hours of Service can be required).
(D) / / one Year of Service (1,000 Hours of Service
is required during the Eligibility Computation
Period.)
(2) Age requirement (check one):
(A) /X/ no age requirement.
(B) / / must have attained age ______ (not to exceed
21).
(3) The class of Employees eligible to participate in the
Plan (check one):
(A) / / includes all Employees of the Employer.
(B) /X/ includes all Employees of the Employer
except for (check the appropriate box(es)):
(i) / / Employees covered by a collective
bargaining agreement.
(ii) / / Highly Compensated Employees as
defined in Code Section 414(q).
(iii)/X/ Leased Employees as defined in
Section 2.01(a)(18).
(iv) / / Nonresident aliens who do not receive
any earned income from the
Employer which constitutes United
States source income.
(v) / / Other
3
Note: No exclusion in this section may create a
discriminatory class of employees. An
Employer's Plan must still pass the Internal
Revenue Code coverage and participation
requirements if one or more of the above groups
of Employees have been excluded from the Plan.
(b) The Entry Date(s) shall be (check one):
(1) / / the first day of each Plan Year (do not select if
Section 1.03 (a)(1)(D) is elected or if there is
an age requirement of greater than 20 1/2 in Section
1.03(a)(2)(B)).
(2) / / the first day of each Plan Year and the date six
months later.
(3) /X/ the first day of each Plan Year and the first day
of the fourth, seventh, and tenth months.
(4) / / the first day of each month.
(c) Date of Initial Participation - An Employee will become a
Participant unless excluded by Section 1.03(a)(3) above
on the Entry Date immediately following the date the
Employee completes the service and age requirement(s) in
Section 1.03(a), if any, except (check one):
(1) /X/ No exceptions.
(2) / / Employees employed on the Effective Date in Section
1.01(g) will become Participants on that date.
(3) / / Employees who meet the age and service requirement(s)
of Section 1.03(a) on the Effective Date in Section
1.01(g) will become Participants on that date.
1.04 COMPENSATION
(a) For purposes of determining contributions under the Plan,
Compensation shall be as defined in Section 2.01(a)(7),
but excluding (check the appropriate box(es)):
(1) / / Overtime Pay.
(2) / / Bonuses (other than non-cash compensation,
including restricted stock and stock options* ).
(3) /X/ Commissions.
(4) /X/ The value of a qualified or a non-qualified stock
option granted to an Employee by the Employer
to the extent such value is includable in the
Employee's taxable income.
_______________________________
* The amount of any non-cash compensation, including compensation
income resulting from restricted stock and the exercise of stock options,
shall be excluded from Compensation for purposes of determining contributions
under the Plan.
4
Note: These exclusions shall not apply for purposes
of the "Top Heavy" requirements in Section 9.03.
(5) / / No exclusions.
(b) Compensation for the First Year of Participation
Contributions for the Plan Year in which an Employee
first becomes a Participant shall be determined based on
the Employee's Compensation (check one):
(1) / / For the entire Plan Year.
(2) /X/ For the portion of the Plan Year in which the
Employee is eligible to participate in the Plan.
1.05 CONTRIBUTIONS
(a) Employer Contributions (check (1) or (2)):
(1) / / Nonintegrated Formula :
For each Plan Year, the Employer will
contribute for each eligible Participant an
amount equal to __________% (not to exceed
25%) of such Participant's Compensation.
(2) /X/ Integrated Formula:
For each Plan Year, the Employer shall
contribute for each Participant an amount equal
to (complete both (A) and (B)):
(A) 4% (not less than 3%) of each
Participant's Compensation.
PLUS
(B) 4% of each Participant's
Compensation in excess of the Integration
Level as defined in (2)(A) below. This
percentage may not exceed the lesser of:
(i) the percentage elected in (A) above, or
(ii) the Applicable Percentage as
defined in (2)(B) below.
The following definitions apply for the
purposes of (1) above (check one):
5
(A) "Integration Level" shall mean the Taxable
Wage Base as defined in (C) below, unless
the Employer elects a lesser amount in (i)
or (ii) below:
(i) $________ (a flat dollar amount that
is less than the Taxable Wage
Base), or
(ii) ________% (not to exceed 100%) of
the Taxable Wage Base.
(B) "Applicable Percentage" shall mean the
percentage provided by the following
table:
If The Integration Level But Less Than
is at Least --% of the --% of the The Applicable
Taxable Wage Base Taxable Wage Base Percentage is:
- -------------------------------------------------------------------------------
0% 20% 5.7%
20% 80% 4.3%
80% 100% 5.4%
100% N/A 5.7%
- -------------------------------------------------------------------------------
(C) "Taxable Wage Base" is the contribution
and benefit base in effect under Section
230 of the Social Security Act at the
beginning of the Plan Year. The Taxable
Wage Base for 1994 is $60,600.
Note: An Employer who maintains any other plan
that provides for Social Security Integration
(permitted disparity) may not elect 1.05
(a)(2).
(3) Eligibility Requirement(s)
A Participant shall be entitled to Employer
contributions for a Plan Year under this Subsection
(a) if the Participant satisfies the following
requirement(s) (Check the appropriate box(es) -
Options (B) and (C) may not be elected together):
(A) / / is employed by the Employer on the last day
of the Plan Year.
(B) / / earns at least 500 Hours of Service during the
Plan Year.
(C) / / earns at least 1,000 Hours of Service during
the Plan Year.
(D) /X/ no requirements.
Note: If option (A), (B) or (C) above is selected
then Employer contributions can only be funded
by the Employer after Plan Year end. Employer
contributions funded during the Plan Year
shall not be subject to the eligibility
requirements of this Section 1.05(a)(3).
6
1.06 RETIREMENT AGE(S)
(a) The Normal Retirement Age under the Plan is (check one):
(1) /X/ age 65.
(2) / / age ____ (specify between 55 and 64).
(3) / / later of the age ___ (can not exceed 65) or
the fifth anniversary of the Participant's
Employment Commencement Date.
(b) /X/ The Early Retirement Age is the first day of the
month after the Participant attains
age 59 (specify 55 or greater) and completes
N/A Years of Service for Vesting.
(c) /X/ A Participant is eligible for Disability Retirement
if he/she (check the appropriate box(es)):
(1) /X/ satisfies the requirements for benefits under the
Employer's Long-Term
Disability Plan.
(2) / / satisfies the requirements for Social Security
disability benefits.
(3) / / is determined to be disabled by a physician
approved by the Employer.
1.07 VESTING SCHEDULE
(a) The Participant's vested percentage in Employer
contributions elected in Section 1.05(a) shall be based upon
the schedule selected below, except with respect to any Plan
Year during which the Plan is Top-Heavy. The schedule
elected in Section 1.12(d) shall automatically apply for a
Top-Heavy Plan Year and all Plan Years thereafter unless the
Employer has already elected a more favorable vesting
schedule below.
(1) Employer Contributions
(check one):
(A) [Reserved]
(B) /X/ 100% Vesting immediately
(C) / / 3 year cliff (see C below)
(D) / / 5 year cliff (see D below)
(E) / / 6 year graduated (see E below)
(F) / / 7 year graduated (see F below)
(G) / / Other vesting (complete G below)
7
VESTING SCHEDULE
- ----------------------------------------------------------------
Years of
Service for
Vesting C D E F G
----------- --- ---- ---- ---- ----
0 0% 0% 0% 0% ---
1 0% 0% 0% 0% ---
2 0% 0% 20% 0% ---
3 100% 0% 40% 0% ---
4 100% 0% 60% 40% ---
5 100% 100% 80% 60% ---
6 100% 100% 100% 80% ---
7 100% 100% 100% 100% 100%
Note: A schedule elected under G above must be at least as
favorable as one of the schedules in C, D, E or F above.
(b) / / Years of Service for Vesting shall exclude:
(1) / / for new plans, service prior to the Effective Date
as defined in Section 1.01(g)(1).
(2) / / for existing plans converting from another plan
document, service prior to the original Effective
Date as defined in Section 1.01(g)(2).
1.08 PREDECESSOR EMPLOYER SERVICE
/ / Service for purposes of eligibility in Section 1.03(a)(1)
and vesting in Section 1.07(a) of this Plan shall include
service with the following employer(s):
(a)
(b)
(c)
(d)
1.09 PARTICIPANT LOANS
Participant loans (check (a) or (b)):
(a) / / will be allowed in accordance with Section 7.09,
subject to a $1,000 minimum amount and will
be granted (check (1) or (2)):
(1) / / for any purpose.
(2) / / for hardship purposes (as defined in Section 7.09)
only.
8
(b) /X/ will not be allowed.
1.10 RESERVED
1.11 DISTRIBUTIONS
(a) Subject to Articles 7 and 8, and (b) below, distributions
under the Plan will be paid as a single lump sum or under
a systematic withdrawal plan (installments) following
retirement, death, disability or other termination of
employment.
(b) / / Check if the Plan was converted (by plan amendment)
from another defined contribution plan, and the
benefits were payable with respect to voluntary after-
tax employee contributions, prior to termination of
employment.
Note: Under Federal Law, distributions to Participants must
generally begin no later than April 1 following the year
in which the Participant attains age 70 1/2.
1.12 TOP HEAVY STATUS
(a) The Plan shall be subject to the Top-Heavy Plan
requirements of Article 9 (check one):
(1) /X/ for each Plan Year.
(2) / / for each Plan Year, if any, for which the Plan is
Top-Heavy as defined in Section 9.02.
(b) In determining Top-Heavy status, if necessary, for an
Employer with at least one defined benefit plan, the
following assumptions shall apply:
(1) Interest rate: _____% per annum
(2) Mortality table: _____________
(3) /X/ Not Applicable
(c) In the event that the Plan is treated as Top-Heavy for a
Plan Year, each non-key Employee shall receive an
Employer Contribution of at least 3 (3, 4, 5, or 7 1/2)%
of Compensation for the Plan Year in
accordance with Section 9.03 (check one):
(1) /X/ under this Plan in any event.
(2) / / under this Plan only if the Participant is not
entitled to such contribution under another
qualified plan of the Employer.
9
Note: Such minimum Employer contribution may be less
than the percentage indicated in (c) above to
the extent provided in Section 9.03(a).
(d) In the event that the Plan is treated as Top-Heavy for a Plan
Year, the following vesting schedule shall apply instead of
the schedule elected in Section 1.07(a) for such Plan Year
and each Plan Year thereafter (check one):
(1) /X/ 100% vested after 0 (not in excess
of 3) Years of Service for Vesting.
(2) / /Years of Service for Vesting Vesting Percentage Must be at Least
0 ________ 0%
1 ________ 0%
2 ________ 20%
3 ________ 40%
4 ________ 60%
5 ________ 80%
6 ________ 100%
Note: If the schedule elected in Section 1.07(a)
is more favorable in all cases than the
schedule elected in (d) above, then the
schedule in Section 1.07(a) will continue to
apply even in Plan Years in which the Plan is
Top-Heavy.
1.13 TWO OR MORE PLANS - Code Section 415 limitation on annual
additions
If the Employer maintains or ever maintained another qualified
plan in which any Participant in this Plan is (or was) a
participant or could become a participant, the Employer must
complete this section. The Employer must also complete this
section if it maintains a welfare benefit fund, as defined in
Section 419(e) of the Code, or an individual medical account, as
defined in Section 415(l)(2) of the Code, under which amounts are
treated as annual additions with respect to any Participant in
this Plan.
(a) If the Employer maintains, or maintained, any other defined
contribution plan or plans which are not Master or Prototype
Plans, Annual Additions for any Limitation Year to this Plan
will be limited (check one):
(1) / / in accordance with Section 5.03 of this Plan.
(2) /X/ in accordance with another method set forth on
an attached separate sheet.
(3) / / Not Applicable.
(b) If the Employer maintains, or maintained, any defined
benefit plan(s), the sum of the Defined Contribution
Fraction and Defined Benefit Fraction for a Limitation Year
may not exceed the limitation specified in Code Section
415(e), modified by section 416(h)(1) of the Code. This
combined plan limit will be met as follows (check one):
10
(1) / / Annual Additions to this Plan are limited so
that the sum of the Defined Contribution Fraction and the
Defined Benefit Fraction does not exceed 1.0.
(2) / / another method of limiting Annual Additions or reducing
projected annual benefits is set forth on an attached
schedule.
(3) /X/ Not Applicable.
1.14 ESTABLISHMENT OF TRUST AND INVESTMENT DECISIONS
(a) nvestment Directions
Participant Accounts will be invested (check one):
(1) / / in accordance with investment directions provided to
the Trustee by the Employer for allocating all
Participant Accounts among the options listed in (b)
below.
(2) /X/ in accordance with investment directions provided
to the Trustee by each Participant for allocating
his entire Account among the options listed in
(b) below.
(b) Plan Investment Options
The Employer hereby establishes a Trust under the Plan in
accordance with the provisions of Article 14, and the
Trustee signifies acceptance of its duties under Article 14
by its signature below. Participant Accounts under the
Trust will be invested among the Fidelity Funds listed below
pursuant to Participant or Employer directions.
Fund Name Fund Number
(1) Fidelity Retirement Money Market Portfolio
(2) Fidelity Intermediate Bond Fund
(3) Fidelity Fund
(4) Fidelity Blue Chip Growth Fund
(5) Fidelity Growth Company Fund
(6) Fidelity US Equity Index Portfolio
(7) Fidelity Overseas Fund
(8)
(9)
(10)
Note: An additional annual recordkeeping fee will be
charged for each fund in excess of seven funds.
To the extent that the Employer selects as an
investment option the Managed Income Portfolio of
the Fidelity Group Trust for Employee Benefit Plans
(the "Group Trust"), the Employer hereby (A) agrees
to the terms of the Group Trust and adopts said
terms as a part of this Agreement and (B)
acknowledges that it has received from the Trustee a
copy of the Group Trust, the Declaration of Separate
Fund for the Managed Income Portfolio of the Group
Trust, and the Circular for the Managed Income
Portfolio.
Note: The method and frequency for change of
investments will be determined under the rules
applicable to the selected funds or, if applicable,
the rules of the Employer adopted in accordance with
Section 6.03. Information will be provided
regarding expenses, if any, for changes in
investment options.
12
1.15 RELIANCE ON OPINION LETTER
An adopting Employer may not rely on the opinion letter issued by
the National Office of the Internal Revenue Service as evidence that
this Plan is qualified under Section 401 of the Code.
If the Employer wishes to obtain reliance that his or her Plan(s)
are qualified, application for a determination letter should be
made to the appropriate Key District Director of the Internal
Revenue Service. Failure to fill out properly the Adoption
Agreement may result in disqualification of the Plan.
This Adoption Agreement may be used only in conjunction with
Fidelity Prototype Plan Basic
Plan Document No. 09. The Prototype Sponsor shall inform the
adopting Employer of any amendments made to the Plan or of the
discontinuance or abandonment of the prototype plan document.
1.16 PROTOTYPE INFORMATION:
Name of Prototype Sponsor: Fidelity Management & Research Co.
Address of Prototype Sponsor: 82 Devonshire Street
Boston, MA 02109
Questions regarding this prototype document may be directed to
the following telephone number:
1-(800) 343-9184.
13
EXECUTION PAGE
(Employer's Copy)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement
to be executed this 27 day of December ,199.
Employer Risk Capital Reinsurance Company
By /s/ Peter A. Appel
Title Managing Director, General
Counsel and Secretary
Employer Risk Capital Reinsurance Company
By /s/ Paul J. Malvasio
Title Managing Director, Chief Financial Officer and
Treasurer
Accepted by
Fidelity Management Trust Company, as Trustee
By /s/ Wayne Isaacs Date Feb. 10, 1997
Title Sr. Legal Counsel/Authorized Signatory
14
Attachment to the Risk Capital Reinsurance Company Pension Plan
Addendum to Section 1.13(a)(2): Any Excess Annual Additions shall be
disposed of as follows: first from the Risk Capital Reinsurance Company
Employee Savings Plan; and second, from this Plan.
Exhibit 10.13.2
The CORPORATEplan for RetirementSM
(Profit Sharing/401(k) Plan)
A Fidelity Prototype Plan
Non-Standardized Adoption Agreement 002
Basic Plan No. 07
ADOPTION AGREEMENT
ARTICLE 1
NON-STANDARDIZED PROFIT SHARING PLAN
1.01 PLAN INFORMATION
(a) Name of Plan:
This is the Risk Capital Reinsurance Company Employee
Savings Plan (the "Plan").
(b) Type of Plan:
(1) / / 401(k) and Profit Sharing
(2) / / Profit Sharing Only
(3) /X/ 401(k) Only
(c) Name of Plan Administrator, if not the Employer:
Address:
Phone Number:
The Plan Administrator is the agent for service of legal
process for the Plan.
(d) Limitation Year (check one):
(1) /X/ Calendar Year
(2) / / Plan Year
(3) / / Other:
(e) Three Digit Plan Number: 001
(f) Plan Year End (month/day): 12/31
(g) Plan Status (check one):
(1) / / Effective Date of new Plan:
(2) /X/ Amendment Effective Date: 1/1/97. This
is (check one):
(A) /X/ an amendment of The CORPORATEplan for
RetirementSM Adoption Agreement previously
executed by the Employer; or
(B) / / a conversion from another plan document into
The CORPORATEplan for RetirementSM.
The original effective date of the Plan:
1/1/96
The substantive provisions of the Plan shall
apply prior to the Effective Date to the
extent require by the Tax Reform Act of 1986
or other applicable laws.
1.02 EMPLOYER
(a) The Employer is Risk Capital Reinsurance Company
Address: 20 Horseneck Lane
Greenwich, CT 06830
Contact's Name: Paul J. Malvasio
Telephone Number: (203) 862-4300
(1) Employer's Tax Identification Number: 06-1430254
(2) Business form of Employer (check one):
(A) /X/ Corporation (D) / / Governmental
(B) / / Sole proprietor or partnership (E) / / Tax-exempt
organization
(C) / / Subchapter S Corporation (F) / / Rural Electric
Cooperative
(3) Employer's fiscal year end: 12/31
(4) Date business commenced: 9/19/95
2
(b) The term "Employer" includes the following Related
Employer(s) (as defined in Section 2.01(a)(26)):
Not Applicable
1.03 COVERAGE
(a) All Employees who meet the conditions specified below
will be eligible to participate in the Plan:
(1) Service requirement (check one):
(A) / / no service requirement.
(B) /X/ three consecutive months of service (no
minimum number Hours of Service can be
required).
(C) / / six consecutive months of service (no minimum
number Hours of Service can be required).
(D) / / one Year of Service (1,000 Hours of Service
is required during the Eligibility
Computation Period.)
(2) Age requirement (check one):
(A) /X/ no age requirement.
(B) / / must have attained age ______ (not to
exceed 21).
3
(3) The class of Employees eligible to participate in the
Plan (check one):
(A) / / includes all Employees of the Employer.
(B) /X/ includes all Employees of the Employer
except for (check the appropriate box(es)):
(i) / / Employees covered by a collective
bargaining agreement.
(ii) / / Highly Compensated Employees as
defined in Code Section 414(q).
(iii) /X/ Leased Employees as defined in Section
2.01(a)(18).
(iv) / / Nonresident aliens who do not receive
any earned income from the Employer which
constitutes United States source income.
(v) / / Other
Note: No exclusion in this section may create a
discriminatory class of employees. An
Employer's Plan must still pass the Internal
Revenue Code coverage and participation
requirements if one or more of the above groups
of Employees have been excluded from the Plan.
(b) The Entry Date(s) shall be (check one):
(1) / / the first day of each Plan Year (do not select if
Section 1.03 (a)(1)(D) is elected or if there is
an age requirement of greater than 20 1/2 in Section
1.03(a)(2)(B)).
(2) / / the first day of each Plan Year and the date six
months later.
(3) /X/ the first day of each Plan Year and the first day
of the fourth, seventh, and tenth months.
(4) / / the first day of each month.
4
(c) Date of Initial Participation--An Employee will become a
Participant unless excluded by Section 1.03(a)(3) above
on the Entry Date immediately following the date the
Employee completes the service and age requirement(s) in
Section 1.03(a), if any, except (check one):
(1) /X/ No exceptions.
(2) / / Employees employed on the Effective Date in Section
1.01(g) will become Participants on that date.
(3) / / Employees who meet the age and service requirement(s)
of Section 1.03(a) on the Effective Date in
Section 1.01(g) will become Participants on that date.
1.04 COMPENSATION
(a) For purposes of determining contributions under the Plan,
Compensation shall be as defined in Section 2.01(a)(7),
but excluding (check the appropriate box(es)):
(1) / / Overtime Pay.
(2) / / Bonuses (other than non-cash compensation,
including restricted stock and stock options*).
(3) /X/ Commissions.
(4) /X/ The value of a qualified or a non-qualified stock
option granted to an Employee by the Employer
to the extent such value is includable in the
Employee's taxable income.
Note: These exclusions shall not apply for purposes
of the "Top Heavy" requirements in Section 9.03 or
for allocating Discretionary Employer
Contributions if an Integrated Formula is elected
in Section 1.05(a)(2).
(5) / / No exclusions.
_______________________________
* The amount of any non-cash compensation, including compensation
income resulting from restricted stock and the exercise of stock options,
shall be excluded from Compensation for purposes of determining contributions
under the Plan.
5
(b) Compensation for the First Year of Participation
Contributions for the Plan Year in which an Employee
first becomes a Participant shall be determined based on
the Employee's Compensation (check one):
(1) / / For the entire Plan Year.
(2) /X/ For the portion of the Plan Year in which the
Employee is eligible to participate in the
Plan.
1.05 CONTRIBUTIONS
(a) / / Employer Contributions :
(1) / / Fixed Formula--Nonintegrated Formula (check (A)
or (B)):
(A) / / Fixed Percentage Employer Contribution:
For each Plan Year, the Employer will
contribute for each eligible Participant an
amount equal to __________% (not to exceed
15%) of such Participant's Compensation.
(B) / / Fixed Flat Dollar Employer Contribution:
For each Plan Year, the Employer will
contribute for each eligible Participant an
amount equal to $_________.
(2) / / Discretionary Formula
The Employer may decide each Plan Year whether to
make a discretionary Employer contribution on
behalf of eligible Participants in accordance with
Section 4.06. Such contributions shal be allocated
to eligible Participants based upon the following
(check (A) or (B)):
(A) / / Nonintegrated Allocation Formula:
In the ratio that each eligible Participant's
Compensation bears to the total Compensation
paid to all eligible Participants for the
Plan Year.
(B) / / Integrated Allocation Formula:
In accordance with Section 4.06.
Note: An Employer who maintains any other plan that
provides for Social Security Integration
(permitted disparity) may not elect (2)(B).
6
(3) Eligibility Requirement(s)
A Participant shall be entitled to Employer
Contributions for a Plan Year under this Subsection
(a) if the Participant satisfies the following
requirement(s) (Check the appropriate box(es)--
Options (B) and (C) may not be elected together):
(A) / / is employed by the Employer on the last day
of the Plan Year.
(B) / / earns at least 500 Hours of Service during the
Plan Year.
(C) / / earns at least 1,000 Hours of Service during
the Plan Year.
(D) / / no requirements.
Note: If option (A), (B) or (C) above is selected
then Employer contributions can only be funded
by the Employer after Plan Year end. Employer
contributions funded during the Plan Year shall
not be subject to the eligibility requirements
of this Section 1.05(a)(3).
(b) /X/ Deferral Contributions
(1) Regular Contributions
The Employer shall make a Deferral Contribution in
accordance with Section 4.01 on behalf of each
Participant who has an executed salary reduction
agreement in effect with the Employer for the
payroll period in question, not to exceed 15%
(no more than 15%) of Compensation for that
period.
(A) A Participant may increase or decrease, on
a prospective basis, his salary reduction
agreement percentage (check one):
(i) / / As of the beginning of each
payroll period.
(ii) / / As of the first day of each
month.
(iii) /X/ As of the next Entry Date.
(iv) / / (Specify, but must be at least
once per Plan Year)
(B) A Participant may revoke, on a prospective
basis, a salary reduction agreement at any time
upon proper notice to the Administrator but in
such case may not file a new salary reduction
agreement until (check one):
(i) / / The first day of the next Plan
Year.
(ii) /X/ Any subsequent Plan Entry Date.
(iii) / / (Specify, but must be at least
once per Plan Year)
7
(2) /X/ Catch-Up Contributions
The Employer may allow Participants upon proper
notice and approval to enter into a special salary
reduction agreement to make additional Deferral
Contributions in an amount up to 100% of their
Compensation for the payroll period(s) in the final
month of the Plan Year.
(3) /X/ Bonus Contributions
The Employer may allow Participants upon proper
notice and approval to enter into a special salary
reduction agreement to make Deferral Contributions
in an amount up to 100% of any Employer paid cash
bonuses made for such Participants during the Plan
Year. The Compensation definition elected by the
Employer in Section 1.04(a) must include bonuses if
bonus contributions are permitted.
Note: A Participant's contributions under (2) and/or
(3) may not cause the Participant to exceed
the percentage limit specified by the Employer
in (1) after the Plan Year. The Employer has
the right to restrict a Participant's right to
make Deferral Contributions if they will
adversely affect the Plan's ability to pass
the actual deferral percentage and/or the
actual contribution percentage test.
(4) / / Qualified Discretionary Contributions
The Employer may contribute an amount which it
designates as a Qualified Discretionary
Contribution to be included in the actual deferral
percentage or actual contribution percentage test.
Qualified Discretionary Contributions shall be
allocated to Non-highly Compensated Employees
(check one):
(A) / / in the ratio which each such Participant's
Compensation for the Plan Year bears to the
total of all such Participants' Compensation for
the Plan Year.
(B) / / as a flat dollar amount for each such
Participant for the Plan Year.
8
(c) /X/ Matching Contributions (only if Section 1.05(b) is
checked)
(1) The Employer shall make a Matching Contribution on
behalf of each Participant in an amount equal to the
following percentage of a Participant's Deferral
Contributions during the Plan Year (check one):
(A) / / 50%
(B) / / 100%
(C) / / %
(D) /X/ (Tiered Match) 100% of the first
3% of the Participant's Compensation
contributed to the Plan,
50% of the next 3% of the Participant's
Compensation contributed to the Plan,
% of the next % of the Participant's
Compensation contributed to the Plan.
Note: The percentages specified above for Matching
Contributions may not increase as the percentage
of Compensation contributed increases.
(E) / / The percentage declared for the year, if
any, by a Board of Directors' Resolution
(or by a Letter of Intent for a Sole
Proprietor or Partnership).
(2) /X/ The Employer may at Plan Year end make an
additional Matching Contribution equal to a
percentage declared by the Employer, through a
Board of Directors' Resolution (or by a Letter of
Intent for a Sole Proprietor or Partnership), of
the Deferral Contributions made by each
Participant during the Plan Year (only if an option
is checked under Section 1.05(c)(1)).
(3) /X/ Matching Contribution Limits (check the
appropriate box):
(A) /X/ Deferral Contributions in excess of
6% of the Participant's Compensation
for the period in question shall not be
considered for Matching Contributions.
Note: If the Employer elects a percentage
limit in (A) above and requests the Trustee
to account separately for matched and
unmatched Deferral Contributions, the
Matching Contributions allocated to each
Participant must be computed, and the
percentage limit applied, based upon each
payroll period.
9
(B) / / Matching Contributions for each Participant
for each Plan Year shall be limited to
$___________.
(4) Eligibility Requirement(s)
A Participant who makes Deferral Contributions
during the Plan Year under Section 1.05(b) shall be
entitled to Matching Contributions for that Plan
Year if the Participant satisfies the following
requirement(s) (Check the appropriate box(es).
Options (B) and (C) may not be elected together):
(A) / / Is employed by the Employer on the last day of
the Plan Year.
(B) / / Earns at least 500 Hours of Service during the
Plan Year.
(C) / / Earns at least 1,000 Hours of Service during
the Plan Year.
(D) / / Is not a Highly Compensated Employee for the
Plan Year.
(E) / / Is not a Partner of the Employer, if the
Employer is a Partnership.
(F) /X/ No requirements.
Note: If option (A), (B) or (C) above is selected
then Matching Contributions can only be funded
by the Employer after the Plan Year ends. Any
Matching Contribution funded before Plan Year
end shall not be subject to the eligibility
requirements of this Section 1.05(c)(4)). If
option (A), (B), or (C) is adopted during a
Plan Year, such option shall not become
effective until the first day of the next Plan
Year.
(d) / / Employee After-Tax Contributions (check one):
(1) / / Future Contributions
Participants may make voluntary non-deductible
Employee Contributions pursuant to Section 4.09 of
the Plan. This option may only be elected if the
Employer has elected to permit Deferral
Contributions under Section 1.05(b). Matching
Contributions by the Employer are not allowed on any
voluntary non-deductible Employee Contributions.
Withdrawals are limited to one per year unless
Employee Contributions were allowed under a previous
plan document which authorized more frequent
withdrawals.
10
(2) / / Frozen Contributions
Participants may not make voluntary non-deductible
Employee Contributions, but the Employer does
maintain frozen Participant voluntary non-deductible
Employee Contribution Accounts.
1.06 RETIREMENT AGE(S)
(a) The Normal Retirement Age under the Plan is (check one):
(1) /X/ age 65.
(2) / / age ____ (specify between 55 and 64).
(3) / / later of the age ___ (can not exceed 65) or the
fifth anniversary of the Participant's
Employment Commencement Date.
(b) /X/ The Early Retirement Age is the first day of the month
after the Participant attains age 59
(specify 55 or greater) and completes
N/A Years of Service for Vesting.
(c) /X/ A Participant is eligible for Disability Retirement
if he/she (check the appropriate box(es)):
(1) /X/ satisfies the requirements for benefits under the
Employer's Long-Term Disability Plan.
(2) / / satisfies the requirements for Social Security
disability benefits.
(3) / / is determined to be disabled by a physician
approved by the Employer.
11
1.07 VESTING SCHEDULE
(a) The Participant's vested percentage in Employer
contributions (Fixed or Discretionary) elected in Section
1.05(a) and/or Matching Contributions elected in Section
1.05(c) shall be based upon the schedule(s) selected below,
except with respect to any Plan Year during which the Plan
is Top-Heavy. The schedule elected in Section 1.12(d) shall
automatically apply for a Top-Heavy Plan Year and all Plan
Years thereafter unless the Employer has already elected a
more favorable vesting schedule below.
(1) Employer Contributions (2) Matching Contributions
(check one): (check one):
(A)/ / N/A - No Employer Contributions (A) / / N/A - No Matching
Contributions
(B)/ / 100% Vesting immediately (B)/X/ 100% Vesting immediately
(C)/ / 3 year cliff (see C below) (C)/ / 3 year cliff (see C below)
(D)/ / 5 year cliff (see D below) (D)/ / 5 year cliff (see D below)
(E)/ / 6 year graduated (see E below) (E)/ / 6 year graduated (see E
below)
(F)/ / 7 year graduated (see F below) (F)/ / 7 year graduated (see F
below)
(G)/ / Other vesting (complete G1 below) (G)/ / Other vesting (complete
G2 below)
VESTING SCHEDULE
- ---------------------------------------------------------------------------
Years of
Service for
Vesting C D E F G1 G2
0 0% 0% 0% 0% ___ ___
1 0% 0% 0% 0% ___ ___
2 0% 0% 20% 0% ___ ___
3 100% 0% 40% 20% ___ ___
4 100% 0% 60% 40% ___ ___
5 100% 100% 80% 60% ___ ___
6 100% 100% 100% 80% ___ ___
7 100% 100% 100% 100% 100% 100%
Note: A schedule elected under G1 or G2 above must be at
least as favorable as one of the schedules in C, D, E or
F above.
(b) / / Years of Service for Vesting shall exclude:
(1) / / for new plans, service prior to the Effective Date
as defined in Section 1.01(g)(1).
(2) / / for existing plans converting from another plan
document, service prior to the original Effective
Date as defined in Section 1.01(g)(2).
12
1.08 PREDECESSOR EMPLOYER SERVICE
Service for purposes of eligibility in Section 1.03(a)(1)
and vesting in Section 1.07(a) of this Plan shall include
service with the following employer(s):
(a)
(b)
(c)
(d)
1.09 PARTICIPANT LOANS
Participant loans (check (a) or (b)):
(a) /X/ will be allowed in accordance with Section 7.09,
subject to a $1,000 minimum amount and will
be granted (check (1) or (2)):
(1) /X/ for any purpose.
(2) / / for hardship withdrawal (as defined in Section
7.10) purposes only.
(b) / / will not be allowed.
1.10 HARDSHIP WITHDRAWALS
Participant withdrawals for hardship prior to termination of
employment (check one):
(a) /X/ will be allowed in accordance with Section 7.10,
subject to a $1,000 minimum amount.
(b) / / will not be allowed.
13
1.11 DISTRIBUTIONS
(a) Subject to Articles 7 and 8 and (b) below,
distributions under the Plan will be paid (check the
appropriate box(es)):
(1) /X/ as a lump sum.
(2) /X/ under a systematic withdrawal plan
(installments).
(b) /X/ Check if a Participant will be entitled to receive a
distribution of all or any portion of the following
Accounts without terminating employment upon
attainment of age 59 1/2 (check one):
(1) / / Deferral Contribution Account
(2) /X/ All Accounts
(c) / / Check if the Plan was converted (by plan amendment)
from another defined contribution plan, and the
benefits were payable as (check the appropriate
box(es)):
(1) / / a form of single or joint and survivor life
annuity.
(2) / / an in-service withdrawal of vested Employer
contributions maintained in a
Participant's account (check (A) and/or (B)):
(A) / / for at least (24 or more)
months.
(B) / / after the Participant has at least 60
months of participation.
(3) / / another distribution option that is a
"protected benefit" under Section 411(d)(6) of
the Internal Revenue Code. Please attach a separate
page identifying the distribution
option(s).
These additional forms of benefit may be provided for
such plans under Articles 7 or 8.
Note: Under Federal Law, distributions to
Participants must generally begin no later than
April 1 following the year in which the Participant
attains age 70 1/2.
14
1.12 TOP HEAVY STATUS
(a) The Plan shall be subject to the Top-Heavy Plan requirements
of Article 9 (check one):
(1) /X/ for each Plan Year.
(2) / / for each Plan Year, if any, for which the Plan is
Top-Heavy as defined in Section 9.02.
(3) / / Not applicable. (This option is available for
plans covering only employees subject to a
collective bargaining agreement and there are no
Employer or Matching Contributions elected in
Section 1.05.)
(b) In determining Top-Heavy status, if necessary, for an
employer with at least one defined benefit plan, the
following assumptions shall apply:
(1) Interest rate: _____% per annum
(2) Mortality table: _____________
(3) / / Not Applicable.
(c) In the event that the Plan is treated as Top-Heavy for a
Plan Year, each non-key Employee shall receive an
Employer Contribution of at least 3 (3,4, 5, or 7 1/2) %
of Compensation for the Plan Year in
accordance with Section 9.03 (check one):
(1) / / under this Plan in any event.
(2) /x/ under this Plan only if the Participant is not
entitled to such contribution under another
qualified plan of the Employer.
(3) / / Not applicable. (This option is available for
plans covering only Employees subject to a
collective bargaining agreement and there are no
Employer or Matching Contributions elected in
Section 1.05.)
Note: Such minimum Employer contribution may be less
than the percentage indicated in (c) above to
the extent provided in Section 9.03(a).
15
(d) In the event that the Plan is treated as Top-Heavy for a Plan
Year, the following vesting schedule shall apply instead of
the schedule(s) elected in Section 1.07(a) for such Plan Year
and each Plan Year thereafter (check one):
(1) /x/ 100% vested after 0 (not in excess
of 3) Years of Service for Vesting.
(2) / / Years of Service Vesting Must be
for Vesting Percentage at Least
---------------------------------------------
0 ________ 0%
1 ________ 0%
2 ________ 20%
3 ________ 40%
4 ________ 60%
5 ________ 80%
6 ________ 100%
Note: If the schedule(s) elected in Section 1.07(a)
is(are) more favorable in all cases than the
schedule elected in (d) above, then the schedule(s)
in Section 1.07(a) will continue to apply even in
Plan Years in which the Plan is Top-Heavy.
1.13 TWO OR MORE PLANS--Code Section 415 limitation on annual
additions:
If the Employer maintains or ever maintained another qualified
plan in which any Participant in this Plan is (or was) a
participant or could become a participant, the Employer must
complete this section. The Employer must also complete this
section if it maintains a welfare benefit fund, as defined in
Section 419(e) of the Code, or an individual medical account, as
defined in Section 415(l)(2) of the Code, under which amounts are
treated as annual additions with respect to any Participant in
this Plan.
(a) If the Employer maintains, or maintained, any other defined
contribution plan which is not a Master or Prototype Plan,
Annual Additions for any Limitation Year to this Plan will
be limited (check one):
(1) / / in accordance with Section 5.03 of this Plan.
(2) /x/ in accordance with another method set forth on an
attached separate sheet.
(3) / / Not Applicable.
16
(b) If the Employer maintains, or maintained, any defined
benefit plan(s), the sum of the Defined Contribution
Fraction and Defined Benefit Fraction for a Limitation Year
may not exceed the limitation specified in Code Section
415(e), modified by section 416(h)(1) of the Code. This
combined plan limit will be met as follows (check one):
(1) / / Annual Additions to this Plan are limited so that
the sum of the Defined Contribution Fraction and
the Defined Benefit Fraction does not exceed 1.0.
(2) / / another method of limiting Annual Additions or
reducing projected annual benefits is set forth
on an attached schedule.
(3) /X/ Not Applicable.
1.14 ESTABLISHMENT OF TRUST AND INVESTMENT DECISIONS
(a) Investment Directions
Participant Accounts will be invested (check one):
(1) / / in accordance with investment directions provided to
the Trustee by the Employer for allocating all
Participant Accounts among the options listed in
(b) below.
(2) /X/ in accordance with investment directions provided to
the Trustee by each Participant for allocating his
entire Account among the options listed in (b)
below.
(3) / / in accordance with investment directions provided to
the Trustee by each Participant for all contribution
sources in a Participant's Account except the
following sources shall be invested as directed by
the Employer (check (A) and/or (B)):
(A) / / Fixed or Discretionary Employer
Contributions
(B) / / Employer Matching Contributions
The Employer must direct the applicable sources
among the same investment options made available for
Participant directed sources listed in (b) below.
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(b) Plan Investment Options
The Employer hereby establishes a Trust under the Plan in
accordance with the provisions of Article 14, and the
Trustee signifies acceptance of its duties under Article 14
by its signature below. Participant Accounts under the
Trust will be invested among the Fidelity Funds listed below
pursuant to Participant and/or Employer directions.
Fund Name Fund Number
--------- -----------
(1) Fidelity Retirement Money Market Portfolio __________
(2) Fidelity Intermediate Bond Fund __________
(3) Fidelity Fund __________
(4) Fidelity Blue Chip Growth Fund __________
(5) Fidelity Growth Company Fund __________
(6) Fidelity US Equity Index Portfolio __________
(7) Fidelity Overseas Fund __________
(8) __________
(9) __________
(10) __________
Note: An additional annual recordkeeping fee will be
charged for each fund in excess of seven funds.
To the extent that the Employer selects as an
investment option the Managed Income Portfolio of
the Fidelity Group Trust for Employee Benefit Plans
(the "Group Trust"), the Employer hereby (A) agrees
to the terms of the Group Trust and adopts said
terms as a part of this Agreement and (B)
acknowledges that it has received from the Trustee a
copy of the Group Trust, the Declaration of Separate
Fund for the Managed Income Portfolio of the Group
Trust, and the Circular for the Managed Income
Portfolio.
Note: The method and frequency for change of
investments will be determined under the rules
applicable to the selected funds or, if applicable,
the rules of the Employer adopted in accordance with
Section 6.03. Information will be provided
regarding expenses, if any, for changes in
investment options.
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1.15 RELIANCE ON OPINION LETTER
An adopting Employer may not rely on the opinion letter issued by
the National Office of the Internal Revenue Service as evidence
that this Plan is qualified under Section 401 of the Code.
If the Employer wishes to obtain reliance that his or her Plan(s)
are qualified, application for a determination letter should be
made to the appropriate Key District Director of the Internal
Revenue Service. Failure to fill out the Adoption Agreement
properly may result in disqualification of the Plan.
This Adoption Agreement may be used only in conjunction with
Fidelity Prototype Plan Basic Plan Document No. 07. The
Prototype Sponsor shall inform the adopting Employer of any
amendments made to the Plan or of the discontinuance or
abandonment of the prototype plan document.
1.16 PROTOTYPE INFORMATION:
Name of Prototype Sponsor: Fidelity Management & Research Co.
Address of Prototype Sponsor: 82 Devonshire Street
Boston, MA 02109
Questions regarding this prototype document may be directed to
the following telephone number:
1-(800) 343-9184.
19
EXECUTION PAGE
(Employer's Copy)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement
to be executed this 27th day of December , 1996.
Employer Risk Capital Reinsurance Company
By /s/ Peter A. Appel
Title Managing Director, General Counsel
and Secretary
Employer Risk Capital Reinsurance Company
By /s/ Paul J. Malvasio
Title Managing Director, Chief Financial
Officer and Treasurer
Accepted by
Fidelity Management Trust Company, as Trustee
By /s/ Wayne Isaacs Date Feb. 10, 1997
Title Sr. Legal Counsel/Authorized Signatory
20
Attachment to the Risk Capital Reinsurance Company Employee Savings Plan
Addendum to Section 1.13(a)(2): Any Excess Annual Additions
shall be disposed of from this Plan as follows: first, distribute
unmatched 401(k) Deferral Contributions; and second, distribute
matched 401(k) Deferral Contributions and forfeit any associated
Matching Contributions.
21
EXHIBIT 10.14.2
RISK CAPITAL REINSURANCE COMPANY
EXECUTIVE SUPPLEMENTAL NON-QUALIFIED
SAVINGS AND RETIREMENT PLAN
AMENDMENT TO ADOPTION AGREEMENT
Rider 3
With respect to annual incentive bonuses payable in 1997
for the 1996 Plan Year, the Employer shall make an additional
Deferral Contribution on behalf of each Participant who has
entered into an agreement with the Employer to defer an amount
from such bonus, such amount not to exceed $20,000. With respect
to the 1996 Plan Year only, the Employer shall make an additional
Deferral Contribution on behalf of each Participant who has
entered into an agreement with the Employer to defer an amount
from his or her Compensation, such amount not to exceed $50,000.
With respect to Plan Years beginning after 1996, the Employer
shall make an additional Deferral Contribution on behalf of each
Participant who has entered into an agreement with the Employer
to defer an amount from his or her Compensation for the Plan Year
and/or his or her annual incentive bonus for the Plan Year
(whether paid in the Plan Year or a subsequent year), such
aggregate amount not to exceed $50,000. All additional Deferral
Contributions set forth in this paragraph shall not be eligible
for Matching Contributions under Section 1.05(b) hereof.
Rider 5
1.05(c) Additional Contributions.
The Employer shall make an Additional Contribution in
accordance with Section 4.04 on behalf of each Participant in
an amount equal to 8% (eight percent) of the Participant's
Excess Compensation.
Employer: Risk Capital Reinsurance
Company
By: /s/ Paul J. Malvasio
Title: Managing Director, Chief
Financial Officer and Treasurer
Date: December 4, 1996
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