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Conning & Company
Insurance Asset Management
VENTURE CARRIED INTERESTS ALLOCATION PLAN
OF
CONNING CORPORATION
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The purpose of this Venture Carried Interest Allocation Plan (the "Plan")
is to reserve a portion of the carried interests from the venture fund
activities of Conning Corporation (the "Company") and its subsidiaries and
affiliates (collectively, the "Group") for the benefit of the employees of
the Group. The Plan is designed to recognize that the foundation for
deriving value from the Group's venture fund activities has been laid
through the efforts of existing employees, but that the future efforts of
these and other employees of the Group will further contribute to the growth
in the value of the reserved carried interest. This Plan is not intended to
replace or diminish awards made to employees under the Company's various
cash bonus and stock option programs.
NOW, THEREFORE, the Company hereby establishes the following plan:
SECTION 1. Definitions.
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As used in this Plan, the following terms shall have the following
meanings:
1.1 Allocation Year - means each of the calendar years 1990 through 1995.
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1.2 Board - means the Board of Directors of the Company.
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1.3 Cause - means repeated insubordination, gross negligence, willful
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misconduct, commission of a felony or substantial failure to perform duties
of Employee's position, which failure involves dishonesty or conduct
materially injurious to the financial condition of the employing company
within the Group.
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Conning & Company
Insurance Asset Management
1.4 Committee - means the Board or a committee appointed by the Board
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to administer the Plan as provided in Section 2. hereof.
1.5 Employee - means any employee of the Group.
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1.6 Venture Interests - means any share or portion of the Venture Pool
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allocated to an Employee.
1.7 Venture Pool - means an amount equal to fifty percent (50%) of any
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carried interest distributions received by Conning & Company (i) directly
from the venture funds known as Conning Insurance Capital Limited
Partnership II, and Conning Insurance Capital International Partners II, or
(ii) through Conning Investment Partners Limited Partnership with respect to
the venture funds known as Conning Insurance Capital Limited Partnership and
Conning Insurance Capital International Partners. [For purposes hereof,
"distributions" shall not include management fees, advisory fees,
reimbursable expenses or other current fees for services rendered.]
SECTION 2. Committee and Its Duties
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2.1 The Committee. The Committee may, from time to time, adopt rules
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and regulations and prescribe forms and procedures for carrying out the
purposes and provisions of the Plan. The Committee shall have the sole and
final authority to select recipients, determine allocations, and determine
all questions arising under the Plan consistent with the requirements of
this document, including the proper construction and interpretation of the
Plan. Any interpretation, decision or determination made by the Committee
shall be final, binding and conclusive upon all interested parties,
including the Company, its subsidiaries and affiliates, their shareholders,
recipients and other Employees and the successors, heirs and representatives
of all such persons.
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Conning & Company
Insurance Asset Management
The Committee may hold meetings at such times and places as it may
decide and shall keep minutes of its proceedings. A majority of the members
of the Committee shall constitute a quorum for purposes of any action taken
by the Committee and all such actions shall be taken by a majority vote of
the members present at any such meeting. Any action by the Committee may be
taken by written instrument signed by all of the members, and any such
action shall be as fully effective as if it had taken by a majority of the
members at a meeting duly called and held.
2.2 Committee's Duties. As soon as practicable after the end of each
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Allocation Year, but prior to the next succeeding March 31st, the Committee
shall:
(1) Select the recipients of Venture Interests from among the
then current Employees of the Group. Such recipients shall be persons that
the Committee determines have contributed to the funding, value, growth,
profitability and success of the Group as a whole, including, the formation,
management and success of the Venture Funds listed in Section 1.6 hereof;
(2) Decide the amount of Venture Interests to be allocated to
each such recipient in accordance with the provisions of this Plan; and
(3) Notify each recipient selected of the amount of Interests
allocated to him or her.
SECTION 3. Determination of Venture Interests.
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3.1 Annual Allocation. The Committee shall set the number of units of
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participation ("Units") representing 100% of the Venture Pool. For each
Allocation Year, the Committee shall award Venture Interests in the form of
the Units equal, in the aggregate, to the percentage of the total Units
indicated for such Allocation Year as follows:
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Conning & Company
Insurance Asset Management
Allocation Year % of All Units
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1990 25.0%
1991 25.0%
1992 20.0%
1993 20.0%
1994 10.0%
Total 100.00%
3.2 Allocation Rules. The annual allocation of Venture Interests made
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by the Committee shall adhere to the following:
(1) Eighty percent (80%) of the Units to be awarded for the 1990
and 1991 Allocation Years shall be awarded, in the aggregate, to those of
the group consisting of the persons listed on Schedule A hereto who are then
Employees. The remaining twenty percent (20%) of such Units shall be
awarded to other Employees.
(2) For Allocation Years subsequent to 1991, Units shall be
awarded to the persons listed on Schedule A hereto who are then Employees,
such that the aggregate number of Units awarded to such persons for a given
Allocation Year compared to the total number of Units awarded for such year
equals at least 80% less the product of 7.5% times the number of persons on
Schedule A who are no longer Employees when such award is made (for example,
if only 5 of such persons are Employees when the award is made, the
percentage awarded to the group shall be reduced to 50% of the total awards
made in the applicable Allocation Year); provided, however, that if the
number of such persons who are Employees falls below 5, no special
allocation of Units to such persons shall be required. Units not required
to be awarded to persons on Schedule A hereto, may be awarded by the
Committee to any Employees in such percentages as the Committee, in its
discretion, deems appropriate in accordance herewith.
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Conning & Company
Insurance Asset Management
(3) If any Units which have been awarded lapse pursuant to
Section 3.3 hereof, the Committee shall promptly reallocate such Units to
Employees.
3.3 Lapse of Venture Interests. Units awarded to a recipient shall
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lapse if, prior to March 31, 1995, the recipient either (i) has voluntarily
terminated his employment with the Group (except due to disability or normal
retirement) or (ii) has had his employment with the Group terminated for
Cause, and, in either case, he enters into competition with the Company as
defined in Section 3.5 hereof. A recipient of an allocation shall be
entitled to share in the Venture Pool on the basis of the Units held by such
recipient which have not lapsed so long as the carried interest
distributions eligible for the Venture Pool are being received by Conning &
Company.
3.4 Payments from Venture Pool. The Venture Pool shall be distributed
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by the Company to the holders of Units according to the number so held.
Distributions shall be made at least once each year, within ninety (90) days
following receipt of distributions by Conning & Company that result in
increases to the Venture Pool hereunder. Venture Pool funds otherwise
available for distribution, but attributable to Units not yet allocated by
the Committee pursuant to this Section, shall be retained and reserved by
the Company until such time as the applicable Units are allocated and
distribution is made to the recipient(s) of such Units.
3.5 Competition. A recipient shall be in competition with the Company
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if he, within the United States, directly or indirectly, owns, operates,
manages, joins, controls, participates in the ownership, management,
operation or control of, or is paid or employed by, or acquires any
securities of, or otherwise becomes associated with or provides assistance
to, as an employee, consultant, director, officer, shareholder, partner,
agent, associate, principal, representative or in any other capacity, any
business entity or activity which is the same, or similar to, or competitive
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Conning & Company
Insurance Asset Management
with the business carried on by the Company or any of its subsidiaries at
the date of termination of his employment, including without limitation the
asset management and investment advisory services provided to institutional
and individual clients, the consulting services provided to insurance
company clients, and the venture capital fund business of the Company (the
"Business"); provided, however, that the foregoing shall not prevent the
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Employee from acquiring the securities of or an interest in any business,
provided such ownership of securities or interest represents at the time of
such acquisition, but including any previously held ownership interest, less
than five percent (5%) of any class or type of securities of, or interest
in, such business.
SECTION 4. Miscellaneous.
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4.1 Effective Date, Plan Duration and Amendments. This Plan shall
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become effective when approved by the Board. The Board shall not have the
right to suspend, cancel or modify the Plan without the approval of the
holders of a majority all Units that have been granted as of the effective
date of such action.
4.2 Limitation of Rights. Nothing in this Plan, or any amendment
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hereof, shall be construed to give any Employee any right to receive Venture
Interests other than as provided herein. Nothing in this Plan, or any
amendment hereof, shall be construed to create rights of employment or to
limit in any way the right of the Company or a subsidiary or affiliate to
terminate an Employee's employment at any time, or give any right to an
Employee to remain employed by the Company or a subsidiary or affiliate in
any particular position or at any particular rate of remuneration.
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Conning & Company
Insurance Asset Management
4.3 Governing Law. This Plan and any rights of any persons hereunder
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shall be construed in accordance with and be governed by the laws of the
State of Connecticut, including its conflict of laws principles.
4.4 Severability. If any provision of this Plan or application
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thereof to any person or circumstance shall to any extent be invalid, the
remainder of this Plan or the application of such provision to persons,
entities, or circumstances other than those as to which it is held invalid,
shall not be affected thereby and each provision of this Plan shall be valid
and enforceable to the fullest extent permitted by law.
4.5 Headings for Convenience. The underlined captions of this Plan
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are for convenience of reference only and shall not be deemed to define or
limit the provisions hereof or to affect their construction or application.
4.6 Gender. Neither the gender nor the number (singular or plural) of
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any word shall be construed to exclude another gender or number where a
difference of gender or number would be appropriate.
4.7 Nonassignability. The Units may not be assigned by the recipient
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without the prior written consent of the Company; provided, however, that
(i) the recipient may designate in such written form as the Company may
reasonably require a beneficiary or beneficiaries to receive the payments
from the Venture Pool upon the death or disability of the recipient, and
(ii) the executors, administrators or other legal representatives of the
recipient or his/her estate may assign the Units to the persons entitled
thereto.
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Amendment No. 1 to
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Venture Carried Interests Allocation Plan
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of Conning Corporation
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AMENDMENT NO. 1 (the "Amendment") dated January 15, 1993, but
effective January 1, 1993, to Venture Carried Interests Allocation Plan of
Conning Corporation (the "Company") adopted at a Board of Directors meeting
of the Company on December 21, 1990 and attached as Exhibit H to a certain
Stock Purchase Agreement between the shareholders of the Company and
Covenant Mutual Insurance Company dated December 28, 1990 (the "Plan").
The Company hereby amends the Plan as follows:
1. Section 3.2 (Allocation Rules) of the Plan is hereby amended by
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deleting subsection (2) thereof in its entirety, and substituting therefor
the following:
"(2) For Allocation Years subsequent to 1991, Units may be
awarded by the Committee to any Employees in such percentages as
the Committee, in its discretion, deems appropriate in accordance
herewith."
Except as specifically amended by this Amendment, all of the terms and
conditions of the Plan shall remain in full force and effect.
CONNING CORPORATION
By: /s/ Fred M. Schpero
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Its: Secretary
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AMENDMENT NO. 2
TO
VENTURE CARRIED INTERESTS ALLOCATION PLAN
OF CONNING CORPORATION
AMENDMENT NO. 2 (the "Amendment") dated December 15, 1995, to
Venture Carried Interests Allocation Plan of Conning Corporation (the
"Company") dated as of December 28, 1990 (the "Plan").
The Company hereby amends the Plan as follows:
Section 3.4 (Payment From Venture Pool) of the Plan is deleted in its
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entirety and the following new Section 3.4 is substituted therefor:
Section 3.4 Payment From Venture Pool. The Venture Pool shall be
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distributed by the Company to the holders of Units according to the number
as held. Distributions shall be made at such time and in such form (cash or
kind) as shall be determined by the Committee. Notwithstanding the
foregoing, distributions of cash shall be made within 90 days following (i)
receipt of cash distributions by Conning & Company that result in increases
to the Venture Pool hereunder or (ii) conversion of in kind distributions to
cash.
Except as specifically amended by this Amendment, all of the terms and
conditions of the Plan shall remain in full force and effect.
Dated at Hartford, CT this 15th day of December, 1995.
CONNING CORPORATION
By: /s/ M. W. Slayton
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Its President and
Chief Executive Officer