EXHIBIT 10.10
CRAWFORD & COMPANY
1996 INCENTIVE COMPENSATION PLAN
(As Amended and Restated through February 2, 1999)
Crawford & Company hereby establishes the Crawford & Company 1996 Incentive
Compensation Plan, effective as of January 1, 1996, to provide to the officers
and key employees of Crawford & Company additional cash incentive compensation
which is tied to the attainment of targeted increases in adjusted revenues and
adjusted pre-tax income of Crawford & Company on a consolidated basis.
I. Definitions
The capitalized terms used in the Plan shall have the following meanings:
1.1 Actual Earnings shall mean the reported Earnings of the Company for the
period with respect to which the Incentive Compensation Pool is determined.
1.2 Actual Earnings Percentage shall mean the percentage computed by
multiplying (i) the Target Earnings Percentage by (ii) a fraction (which
may not be larger than one) the numerator of which is Covered Earnings and
the denominator of which is the difference between (A) the Target Earnings
and (B) the Threshold Earnings.
1.3 Actual Revenues shall mean the reported Revenues of the Company for the
period with respect to which the Incentive Compensation Pool is determined.
1.4 Chief Executive Officer shall mean the Chief Executive Officer of the
Company.
1.5 Committee shall mean the Senior Compensation and Stock Option Committee of
the Board of Directors of the Company.
1.6 Company shall mean Crawford & Company.
1.7 Covered Earnings shall mean the difference between (i) the Actual Earnings
and (ii) the Threshold Earnings (but not less than zero).
1.8 Covered Salaries shall mean the base salaries of the Participants.
1.9 Earnings shall mean the reported pre-tax income of the Company, on a
consolidated basis, adjusted to eliminate the effect, if any, of the
cumulative effects of changes in accounting principles and any significant
gains or losses resulting from the disposition of any major assets of the
Company, such as the sale of land, the sale and leaseback of buildings, or
the sale or other disposition of a subsidiary or portion of the Company's
operations.
1.10 Incentive Compensation Pool shall mean the sum of (1) the Incentive
Compensation Pool--Sales and Account Management; plus (2) the Incentive
Compensation Pool--Other Officers and Key Employees.
1.11 Incentive Compensation Pool--Other Officers and Key Employees shall mean
the sum of (1) the amount computed by multiplying the lesser of Actual
Earnings or Threshold Earnings by 1.5%; plus (2) the amount computed by
multiplying (i) Actual Earnings by (ii) the Actual Earnings Percentage. In
no event shall the Incentive Compensation Pool--Other Officers and Key
Employees exceed 100% of the Covered Salaries of its Participants.
1.12 Incentive Compensation Pool--Sales and Account Management shall mean the
greater of (1) the amount computed by multiplying the lesser of Actual
Earnings or Threshold Earnings by .5%; or (2) the amount computed by
multiplying the growth in Actual Revenues over Threshold Revenues by 1.5%,
reduced by 10% for every 1% decline in the consolidated Pre-Tax Profit
Margin of the Company on a pro rata basis. In no event shall the Incentive
Compensation Pool--Sales and Account Management exceed 100% of the Covered
Salaries of its Participants.
1.13 Participant shall mean any officer (other than the Chief Executive Officer)
or home office or regional employee of the Company or its domestic or
foreign subsidiaries designated by the Chief Executive Officer to
participate in the Incentive Compensation Pool--Sales and Account
Management or the Incentive Compensation Pool--Other Officers and Key
Employees.
1.14 Pre-Tax Profit Margin shall mean the percentage derived by dividing
Earnings by Revenues, both adjusted to eliminate the effect, if any, of
significant acquisitions made by the Company in the relevant period.
1.15 Revenues shall mean the reported revenues of the Company, on a consolidated
basis, adjusted to eliminate the effect, if any, of significant
acquisitions made by the Company in the period with respect to which the
Incentive Compensation Pool is determined.
1.16 Target Earnings shall mean the Committee's determination of achievable
earnings for the Company for the fiscal year.
1.17 Target Earnings Percentage shall mean 5.22%.
1.18 Threshold Earnings shall mean the Committee's determination of Earnings
below which no amount will be added to the Incentive Compensation Pool for
earnings growth.
1.19 Threshold Revenues shall mean the Committee's determination of achievable
Revenues for the Company in the period with respect to which the Incentive
Compensation Pool is determined.
1.20 Plan shall mean this Crawford & Company 1996 Incentive Compensation Plan.
II. Establishment of Threshold Revenues and Earnings
As soon as possible following the availability of audited financial statements
of the Company for the immediately preceding fiscal year and the preparation of
operational budgets for the current fiscal year, the Committee shall meet to
establish the (i) Threshold Revenues, (ii) Threshold Earnings and (iii) Target
Earnings for the current fiscal year. Any adjustments to the audited revenues
and pre-tax
income of the Company in the calculations of Revenues and Earnings shall be
approved by the Committee.
III. Allocation and Payment to Participants
The Chief Executive Officer shall have total authority and discretion with
respect to the determination of amounts to be paid to the Participants in each
of the Incentive Compensation Pools under the provisions of this Plan. He may
delegate that responsibility and allocate amounts available for distribution to
the heads of the business units and support divisions of the Company. In the
event that an individual is no longer a Participant at the end of any period
with respect to which the Incentive Compensation Pool is determined by virtue of
his no longer being an employee of the Company or any of its domestic or foreign
subsidiaries on that date, such individual shall not be eligible for any
payments under this Plan, unless such individual's employment has been
terminated by reason of death, disability, or retirement. Nothing herein
contained shall be construed to require the Committee or the Chief Executive
Officer to authorize the allocation and payment of all or any amounts available
for distribution under the terms of this Plan. Amounts not distributed with
respect to any year shall not be carried over to subsequent fiscal years.
Payment to individual Participants shall be as soon as practical after the close
of the fiscal period, the availability of reported Revenues and Earnings for
that period, the calculation of the Incentive Compensation Pool for that period
by the Chief Financial Officer of the Company, and the approval of that
calculation by the Committee.
IV. No Contract of Employment
The establishment of this Plan shall not grant to any Participant the right to
remain an employee for any specific term of employment or in any specific
capacity or as a Participant or at any specific rate of compensation.
V. No Alienation or Assignment
A Participant shall have no right or power to alienate, commute, anticipate or
otherwise assign at law or equity all or any portion of amounts which may be
payable to him hereunder and the Committee and the Chief Executive Officer shall
have the right, in light of any such action, to suspend temporarily or terminate
permanently the status of such an individual as a Participant under this Plan.
VI. Administration, Amendment and Termination
The Committee shall have all powers necessary to administer this Plan in its
absolute discretion and its determination shall be binding on the Company and
the Participants. The Board of Directors of the Company and the Committee have
the right to amend or terminate this Plan at any time.
VII. Construction
This Plan shall be construed in accordance with the laws of the State of Georgia
and the masculine shall include the feminine and the singular the plural, where
appropriate.
VII. Termination of Former Plan
The Annual Incentive Compensation Plan adopted effective January 1, 1993, is
hereby terminated.
IN WITNESS WHEREOF, Crawford & Company has caused its duly authorized officer to
execute the Plan this 30th day of January, 1996, to evidence the adoption of
this Plan.
CRAWFORD & COMPANY
/s/ F. L. Minix
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F. L. Minix, Chairman of the Board,
and Chief Executive Officer