Exhibit 4.3
HILB, ROGAL AND HAMILTON COMPANY
Executive Voluntary Deferral Plan
Effective
January 1, 2000
Amended and Restated Effective
January 1, 2002
TABLE OF CONTENTS
Page
----
ARTICLE I Definition of Terms..........................................................1
1.1 Account...............................................................1
1.2 Administrator.........................................................1
1.3 Affiliate.............................................................1
1.4 Beneficiary...........................................................1
1.5 Benefit Commencement Date.............................................1
1.6 Board.................................................................1
1.7 Bonus.................................................................1
1.8 Closing Price.........................................................1
1.9 Code..................................................................2
1.10 Committee.............................................................2
1.11 Corporation...........................................................2
1.12 Death Benefit.........................................................2
1.13 Deferral Amount.......................................................2
1.14 Deferral Benefit......................................................2
1.15 Deferral Contribution.................................................2
1.16 Deferral Contribution Date............................................2
1.17 Deferral Election.....................................................2
1.18 Deferred Cash Account.................................................2
1.19 Deferred Stock Unit...................................................2
1.20 Deferred Stock Unit Account...........................................2
1.21 Disabled and Disability...............................................3
1.22 Effective Date........................................................3
1.23 Eligible Executive....................................................3
1.24 First Plan Year.......................................................3
1.25 Participant...........................................................3
1.26 Plan..................................................................3
1.27 Plan Year.............................................................3
1.28 Rate of Return........................................................3
1.29 Retirement............................................................3
1.30 Salary................................................................3
ARTICLE II Eligibility and Participation...............................................3
2.1 Eligibility...........................................................3
2.2 Participation.........................................................4
2.3 Commencement of Active Participation..................................4
2.4 Length of Participation...............................................4
-i-
TABLE OF CONTENTS
Page
----
ARTICLE III Determination of Deferral..................................................4
3.1 Deferral Benefit......................................................4
3.2 Deferral Election.....................................................4
3.3 Subtractions from Deferred Cash Account and Deferred Stock Unit
Account...............................................................6
3.4 Crediting of Interest to Deferred Cash Account........................6
3.5 Equitable Adjustment in Case of Error or Omission.....................6
3.6 Statement of Benefits.................................................6
ARTICLE IV Accounts and Investments....................................................6
4.1 Accounts..............................................................6
4.2 Deferred Stock Units.................................................6
4.3 Hypothetical Nature of Accounts and Investments.......................7
ARTICLE V Vesting......................................................................7
5.1 Vesting...............................................................7
ARTICLE VI Death Benefits...............................................................8
6.1 Pre-Benefit Commencement Date Death Benefit...........................8
6.2 Post-Benefit Commencement Date Death Benefit..........................8
ARTICLE VII Payment of Benefits........................................................8
7.1 Payment of Deferral Benefit...........................................8
7.2 Payment of Death Benefit..............................................8
7.3 Form of Payment of Deferral Benefit...................................8
7.4 Benefit Determination and Payment Procedure...........................8
7.5 Payments to Minors and Incompetents...................................9
7.6 Distribution of Benefit When Distributee Cannot Be Located............9
7.7 Deferral Benefit Upon Disability or Retirement........................9
ARTICLE VIII Beneficiary Designation...................................................9
8.1 Beneficiary Designation...............................................9
ARTICLE IX Withdrawals................................................................10
9.1 No Withdrawals Permitted.............................................10
9.2 Hardship Exemption...................................................10
ARTICLE X Funding.....................................................................11
10.1 Funding..............................................................11
-ii-
TABLE OF CONTENTS
Page
----
ARTICLE XI Change of Control..........................................................11
11.1 Change of Control....................................................11
11.2 Effect of Change of Control..........................................13
ARTICLE XII Plan Administrator........................................................14
12.1 Appointment of Administrator.........................................14
12.2 Duties and Responsibilities of Plan Administrator....................14
12.3 Claims Procedures....................................................14
ARTICLE XIII Amendment or Termination of Plan.........................................15
13.1 Amendment or Termination of the Plan.................................15
ARTICLE XIV Miscellaneous.............................................................16
14.1 Non-assignability....................................................16
14.2 Notices and Elections................................................16
14.3 Delegation of Authority..............................................16
14.4 Service of Process...................................................16
14.5 Governing Law........................................................16
14.6 Binding Effect.......................................................16
14.7 Severability.........................................................16
14.8 Gender and Number....................................................16
14.9 Titles and Captions..................................................16
-iii-
Hilb, Rogal and Hamilton Company
Executive Voluntary Deferral Plan
The Board of Directors is of the opinion that it is in the best
interests of Hilb, Rogal and Hamilton Company (the "Corporation") to provide
certain key executives an opportunity to defer, on a pre-tax basis a portion of
their compensation, as well as an opportunity for such key executives to align
their interests with the Corporation by being tied to the performance of the
Corporation's common stock.
Pursuant to action taken by the Compensation Committee of the Board of
Directors, the following Hilb, Rogal and Hamilton Company Executive Voluntary
Deferral Plan (the "Plan") is hereby adopted.
ARTICLE I
Definition of Terms
-------------------
The following words and terms as used in this Plan shall have the
meaning set forth below, unless a different meaning is clearly required by the
context:
1.1 Account: A bookkeeping account established for a Participant
under Article IV hereof.
1.2 Administrator: The Committee or its designee is the Plan
Administrator.
1.3 Affiliate: Any subsidiary, parent, affiliate, or other related
business entity to the Corporation.
1.4 Beneficiary: The person or persons designated by a Participant
or otherwise entitled pursuant to Section 8.1 to receive benefits under the Plan
attributable to such Participant after the death of such Participant.
1.5 Benefit Commencement Date: The date irrevocably elected by the
Participant pursuant to Section 3.2, which date may not be later than the
January 1 following the Participant's 75th birthday. The same Benefit
Commencement Date shall be required for all Deferral Contributions made and
Deferral Benefits attributable to a Plan Year.
1.6 Board: The present and any succeeding Board of Directors of
the Corporation, unless such term is used with respect to a particular Affiliate
and its Directors, in which event it shall mean the present and any succeeding
Board of Directors of that Affiliate.
1.7 Bonus: Compensation paid to a Participant for services
rendered to the Corporation, which is designated as a "bonus" by the Committee
and which shall include without limitation any pre-tax or sub-goal bonuses.
1.8 Closing Price: The closing price of a share of common stock of
the Corporation as reported on the New York Stock Exchange composite tape on
such day or, if the common
stock of the Corporation was not traded on the New York Stock Exchange on such
day, then on the next preceding day that the common stock of the Corporation was
traded on such exchange, all as reported by such source as the Administrator may
select.
1.9 Code: The Internal Revenue Code of 1986, as the same may be
amended from time to time.
1.10 Committee: The Compensation Committee of the Board.
1.11 Corporation: Hilb, Rogal and Hamilton Company or any successor
thereto.
1.12 Death Benefit: The benefit with respect to a Participant due a
Participant's Beneficiary, determined in accordance with Article VI hereof.
1.13 Deferral Amount: With respect to each Plan Year, the sum of
the Deferral Contributions of a Participant with respect to his Salary and Bonus
to be paid during the Plan Year.
1.14 Deferral Benefit: The balance in a Participant's Deferred Cash
Account and Deferred Stock Unit Account.
1.15 Deferral Contribution: The portion of a Participant's Salary
and Bonus, which is deferred under the Plan.
1.16 Deferral Contribution Date: The Date, set by the
Administrator, on which a Deferral Contribution is credited to a Participant's
Deferred Cash Account or Deferred Stock Unit Account in accordance with Section
3.2.
1.17 Deferral Election: An irrevocable election of a Deferral
Amount in writing executed by the Eligible Executive or Participant and timely
filed with the Administrator.
1.18 Deferred Cash Account: An unfunded, bookkeeping account
maintained on the books of the Corporation for a Participant, which reflects the
Participant's Deferral Contributions made under the Plan. Separate subdivisions
of the Deferred Cash Account shall continue to be maintained to reflect Deferral
Contributions made and Deferral Benefits attributable with respect to each Plan
Year.
1.19 Deferred Stock Unit: A hypothetical share of the Corporation's
common stock.
1.20 Deferred Stock Unit Account: An unfunded, bookkeeping account
maintained on the books of the Corporation for a Participant, which reflects his
interest in amounts attributable to his Deferred Contributions under the Plan.
Separate subdivisions of the Deferred Stock Unit Account shall be maintained to
reflect Deferral Contributions made and Deferral Benefits attributable with
respect to each Plan Year and within each Plan Year, the Deferral Contributions
and Deferral Benefits attributable to Deferral Contributions of Bonus and
Deferral Premiums.
-2-
1.21 Disabled and Disability: These terms shall have the meanings
assigned to such terms in the Company's Long-Term Disability Plan, as amended
from time to time.
1.22 Effective Date: The Effective Date of the Plan is January 1,
2000.
1.23 Eligible Executive: An executive who has the rank of President
or higher of a subsidiary of the Company or a member of the executive group of
the Company.
1.24 First Plan Year: The Plan Year commencing February 1, 2000.
1.25 Participant: An Eligible Executive who elects to participate
in the Plan, and further differentiated as follows:
(i) "Active Participant": A Participant who has an
election to make Deferral Contributions to the Plan in effect at the
time in question.
(ii) "Inactive Participant": A Participant who does not
have an election to make Deferral Contributions to the Plan in effect
at the time in question.
1.26 Plan: This document, as contained herein or duly amended,
which shall be known as the "Hilb, Rogal and Hamilton Company Executive
Voluntary Deferral Plan".
1.27 Plan Year: The calendar year during which a Participant's
Bonus is earned.
1.28 Rate of Return: Seven percent (7%) until, if ever, increased
by the Compensation Committee.
1.29 Retirement: A Participant's termination of employment with the
Company (i) at or after age 65 or (ii) at or after age 55 so long as the
Participant has been employed with the Company for at least ten years.
1.30 Salary: Compensation paid to a Participant for services
rendered to the Corporation, excluding that amount which is designated as a
"bonus" by the Committee.
ARTICLE II
Eligibility and Participation
-----------------------------
2.1 Eligibility. Each Eligible Executive shall be eligible to
participate in the Plan and to defer Salary and Bonus for such Plan Year as
provided in this Plan. Any questions as to whether an executive is employed at
the level of President or higher of a subsidiary of the Company or is a member
of the executive group of the Company shall be determined by the Administrator,
in its sole discretion, in accordance with Company policy, if any, on such
matters.
-3-
2.2 Participation.
(a) In order to become an Active Participant and to make Deferral
Contributions with respect to a Plan Year, an Eligible Executive must file with
the Administrator a Deferral Election, in accordance with the terms and
conditions set forth in Section 3.2. For the First Plan Year, such Deferral
Election must be filed no later than January 31, 2000. With respect to all Plan
Years other than the First Plan Year, such Deferral Election must be filed no
later than the December 31 preceding such Plan Year or at such earlier time as
may be set by the Committee in its sole discretion.
(b) By executing and filing such election with the Administrator,
an Eligible Executive consents and agrees to the following:
(i) To execute such applications and take such physical
examinations and to supply truthfully and completely such information
as may be requested by any health questionnaire provided by the
Administrator;
(ii) To be bound by all terms and conditions of the Plan
and all amendments thereto.
2.3 Commencement of Active Participation. An Eligible Executive
shall become an Active Participant with respect to a Plan Year only if he is
expected to have Salary and Bonus during such Plan Year, and he timely files and
has in effect a Deferral Election for such Plan Year.
2.4 Length of Participation. An individual who is or becomes a
Participant shall be or remain an Active Participant as long as he has a
Deferral Election in effect; and he shall be or remain an Inactive Participant
as long as he is entitled to future benefits under the terms of the Plan and is
not considered an Active Participant.
ARTICLE III
Determination of Deferral
-------------------------
3.1 Deferral Benefit. For purposes hereof, a Participant's
Deferral Benefit shall be the balance in his Deferred Cash Account and his
Deferred Stock Unit Account at the time in question.
3.2 Deferral Election.
(a) Subject to the restrictions and conditions hereinafter
provided, a Participant may irrevocably elect, as a Deferral Contribution with
respect to a Plan Year, to defer part of the Participant's Salary, plus part or
all of the Participant's Bonus for a given Plan Year, which is specified in his
Deferral Election for such Plan Year in accordance with the conditions set forth
in this Section 3.2. Any such Deferral Election must be filed with the
Administrator at the time required under Section 2.2(a).
-4-
(b) The following conditions apply:
(i) The maximum Deferral Contribution with respect to any
Participant for a Plan Year shall be fifty percent (50%) of his Salary
and one hundred percent (100%) of his Bonus for such Plan Year, and
such election shall be expressed by the Participant's indication of (x)
the excess of a dollar level, (y) a stated percentage, or (z) a stated
percentage of the excess of a dollar level of the Participant's Salary
and Bonus for a given Plan Year.
(ii) On such election form, the Participant shall indicate
how the Deferral Contribution is to be allocated between the
Participant's Deferred Cash Account and the Participant's Deferred
Stock Unit Account. To the extent that a Participant elects to defer
amounts into his Deferred Cash Account, the Participant's Deferred Cash
Account shall be credited with the dollar amount of the Deferral
Contribution allocated to such Account either (i) as of the day on
which the Salary and/or Bonus would otherwise be paid to the
Participant if such day is a Deferral Contribution Date, or (ii) if
such day on which the Salary and/or Bonus would otherwise be paid is
not a Deferral Contribution Date, then as of the next occurring
Deferral Contribution Date. To the extent that a Participant elects to
defer amounts into his Deferred Stock Unit Account, the Participant's
Deferred Stock Unit Account shall be credited with that number of
Deferred Stock Units determined by dividing the dollar amount of the
Participant's Deferral Contribution to the Deferred Stock Unit Account
by the Closing Price either (i) as of the day on which the Salary
and/or Bonus would otherwise be paid to the Participant if such day is
a Deferral Contribution Date; or (ii) if such day on which the Salary
and/or Bonus would otherwise be paid is not a Deferral Contribution
Date, then as of the next occurring Deferral Contribution Date.
(iii) A separate Deferral Election must be filed for each
Plan Year.
(iv) Each Deferral Election shall be made on a form
provided by the Administrator and shall specify any such information as
the Administrator may require.
(v) A Deferral Election must specify the manner of
payment and the period of payment. A Participant may elect to receive a
lump sum payment or annual installment payments over a term of years of
up to fifteen years.
(vi) A Deferral Election must specify the Benefit
Commencement Date. A Participant may elect to receive payments on a
date which is at least three (3) years from the Deferral Contribution
Date for such election but in no event later than the January 1
following the Participant's 75th birthday or on a date which is the
later of three (3) years from the Deferral Contribution Date for such
election but in no event later than the January 1 following the
Participant's 75th birthday or the Participant's termination of
employment with the Corporation. The Benefit Commencement Date
specified in the Participant's Deferral Election may be accelerated
upon the Participant's death, Disability, Retirement or upon a Change
of Control as further provided in this Plan.
-5-
(vii) A Participant shall have the option of postponing the
elected Benefit Commencement Date of a Deferral Benefit whether from
the Participant's Deferred Cash Account or Deferred Stock Unit Account
by making an irrevocable election to roll over such Deferral Benefit at
least one year before such Deferral Benefit is payable, provided that
the Participant may not change his previous allocation of amounts to
his Deferred Cash Account and Deferred Stock Unit Account at such time
and provided that a Participant may not postpone the elected Benefit
Commencement Date past the January 1 following the Participant's 75th
birthday. A Participant shall make such election on a form designated
by the Administrator.
3.3 Subtractions from Deferred Cash Account and Deferred Stock
Unit Account. All distributions from a Participant's Deferred Cash Account and
Deferred Stock Unit Account shall be subtracted when such distributions are
made.
3.4 Crediting of Interest to Deferred Cash Account. There shall be
credited to each Participant's Deferred Cash Account an amount representing
interest on the balance of such account. Interest shall be credited as earned.
Such interest shall be based on the applicable Rate of Return for the Plan Year.
3.5 Equitable Adjustment in Case of Error or Omission. If an error
or omission is discovered in the Deferred Cash Account and Deferred Stock Unit
Account of a Participant, the Administrator shall make such equitable
adjustments as the Administrator deems appropriate.
3.6 Statement of Benefits. Within a reasonable time after the end
of the Plan Year and at the date a Participant's Deferral Benefit or Death
Benefit becomes payable under the Plan, the Administrator shall provide to each
Participant (or, if deceased, to his Beneficiary) a statement of the benefit
under the Plan.
ARTICLE IV
Accounts and Investments
------------------------
4.1 Accounts. A separate Account under the Plan shall be
established for each Participant. Such Account shall be (a) credited with the
amounts credited in accordance with Section 3.2, (b) credited (or charged, as
the case may be) with the investment results determined in accordance with
Section 4.2, and (c) charged with the amounts paid by the Plan to or on behalf
of the Participant in accordance with Article VII. With each Participant's
Account, separate subaccounts including a Deferred Stock Unit Account and a
Deferred Cash Account shall be maintained.
4.2 Deferred Stock Units. Except as provided below, a
Participant's Deferred Stock Unit Account shall be treated as if it were
invested in Deferred Stock Units that are equivalent in value to the fair market
value of the shares of the Corporation's common stock in accordance with the
following rules:
-6-
(a) The number of Deferred Stock Units credited to a Participant's
Deferred Stock Unit Account shall be increased on each date on which a dividend
is paid on the Corporation's common stock. The number of additional Deferred
Stock Units credited to a Participant's Deferred Stock Unit Account as a result
of such increase shall be determined by (i) multiplying the total number of
Deferred Stock Units (with fractional Deferred Stock Units rounded off to the
nearest thousandth) credited to the Participant's Deferred Stock Unit Account
immediately before such increase by the amount of the dividend paid per share of
the Corporation's common stock on the dividend payment date, and (ii) dividing
the product so determined by the Closing Price on the dividend payment date.
(b) The dollar value of the Deferred Stock Units credited to a
Participant's Deferred Stock Unit Account on any date shall be determined by
multiplying the number of Deferred Stock Units (including fractional Deferred
Stock Units) credited to the Participant's Deferred Stock Unit Account by the
Closing Price on that date.
(c) In the event of a transaction or event described in this
subsection (c), the number of Deferred Stock Units credited to a Participant's
Deferred Stock Unit Account shall be adjusted in such manner as the Board, in
its sole discretion, deems equitable. A transaction or event is described in
this subsection (c) if (i) it is a dividend (other than regular quarterly
dividends) or other distribution (whether in the form of cash, shares, other
securities, or other property), extraordinary cash dividend, recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, repurchase, or exchange of shares or other securities, the
issuance or exercisability of stock purchase rights, the issuance of warrants or
other rights to purchase shares or other securities, or other similar corporate
transaction or event and (ii) the Board determines that such transaction or
event affects the shares of the Corporation's common stock, such that an
adjustment pursuant to this paragraph (c) is appropriate to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan.
4.3 Hypothetical Nature of Accounts and Investments. Each Account
established under this Article IV shall be maintained for bookkeeping purposes
only. Neither the Plan nor any of the Accounts established under the Plan shall
hold any actual funds or assets. The Deferred Stock Units established hereunder
shall be used solely to determine the amounts to be paid hereunder, shall not
represent an equity security of the Corporation, and shall not carry any voting
or dividend rights.
ARTICLE V
Vesting
-------
5.1 Vesting. A Participant's Deferred Cash Account and Deferred
Stock Unit Account shall be fully vested and non-forfeitable at all times.
-7-
ARTICLE VI
Death Benefits
--------------
6.1 Pre-Benefit Commencement Date Death Benefit. In the event that
a Participant dies prior to his Benefit Commencement Date, then the Beneficiary
of such Participant shall be entitled to receive the value of the Participant's
Account. This Death Benefit shall be paid pursuant to the Participant's election
form except that the payment shall be made, or begin, no more than ninety (90)
days after the Participant's date of death. To the extent not paid out in a lump
sum payment, the Participant's Deferred Stock Unit Account will continue to be
credited with additional Deferred Stock Units in accordance with Section 4.2 and
the Participant's Deferred Cash Account shall accrue annual interest thereafter
at the Rate of Return.
6.2 Post-Benefit Commencement Date Death Benefit. In the event
that a Participant dies after his Benefit Commencement Date, then the
Beneficiary of such Participant shall be entitled to receive as a Death Benefit
a continuation of the payment of the Deferral Benefit in the same manner and in
the same amount that the Participant would have received had the Participant
lived to receive the Deferral Benefit.
ARTICLE VII
Payment of Benefits
-------------------
7.1 Payment of Deferral Benefit. A Participant's Deferral Benefit,
if any, shall become payable to the Participant as of the Benefit Commencement
Date specified in his Deferral Election or as soon thereafter as is
administratively practical. If the Participant has elected to receive the
Deferral Benefit in annual installments, each of the Participant's installment
payments shall be comprised of accrued interest, if any, and that portion of the
Participant's Deferral Benefit equal to the balances in the Participant's
Deferred Cash Account and Deferred Stock Unit Account divided by the number of
remaining annual installment payments to be made to the Participant.
7.2 Payment of Death Benefit. A Participant's Death Benefit shall
be payable to his Beneficiary as set forth in Article VI.
7.3 Form of Payment of Deferral Benefit. A Participant shall be
paid his Deferral Benefit beginning at the Benefit Commencement Date in a lump
sum or in periodic installment payments payable annually for the term of years
as irrevocably elected by the Participant pursuant to Section 3.2. A
Participant's Deferred Stock Unit Account shall be paid in shares of the
Corporation's common stock with fractional shares paid in cash, and the Deferred
Cash Account shall be paid in cash.
7.4 Benefit Determination and Payment Procedure. The Administrator
has the authority, in its sole discretion and judgment to make all
determinations concerning eligibility for benefits under the Plan, the time or
terms of payment, and the form or manner of payment to the Participant or the
Participant's Beneficiary, in the event of the death or Disability of the
Participant. The Administrator shall promptly notify the Corporation of each
such determination
-8-
that benefit payments are due and provide to the Corporation all other
information necessary to allow the Corporation to carry out said determination,
whereupon the Corporation shall pay such benefits in accordance with the
Administrator's determination.
7.5 Payments to Minors and Incompetents. If a Participant or
Beneficiary entitled to receive any benefits hereunder is a minor or is adjudged
to be legally incapable of giving valid receipt and discharge for such benefits,
or is deemed so by the Administrator, benefits will be paid to such person as
the Administrator may designate for the benefit of such Participant or
Beneficiary. Such payments shall be considered a payment to such Participant or
Beneficiary and shall, to the extent made, be deemed a complete discharge of any
liability for such payments under the Plan.
7.6 Distribution of Benefit When Distributee Cannot Be Located.
The Administrator shall make all reasonable attempts to determine the identity
and/or whereabouts of a Participant or a Participant's Beneficiary entitled to
benefits under the Plan, including the mailing by certified mail of a notice to
the last known address shown on the Corporation's or the Administrator's
records. If the Administrator is unable to locate such a person entitled to
benefits hereunder, or if there has been no claim made for such benefits, the
Corporation shall continue to hold the benefit due such person, subject to any
applicable statute of escheats.
7.7 Deferral Benefit Upon Disability or Retirement. In the event
of the Participant's Disability or Retirement prior to his selected Benefit
Commencement Date, the Participant's Benefit Commencement Date shall be adjusted
to the first day of the month following the Participant's Retirement or
Disability. To the extent not paid out in a alump sum payment, the Deferred
Stock Unit Account of a Participant who has elected to receive his Deferral
Benefit in annual installments shall continue to be credited with additional
Deferred Stock Units in accordance with Section 4.2. The Deferred Cash Account
shall continue to accrue interest at the Rate of Return. The Participant's
Deferral Benefit shall become payable on the first day of the month following
such event and shall be paid in the manner prescribed on the Participant's
election form, except with regard to the Participant's originally selected
Benefit Commencement Date.
ARTICLE VIII
Beneficiary Designation
-----------------------
8.1 Beneficiary Designation.
(a) A Participant may designate a Beneficiary and a contingent
Beneficiary. Any Beneficiary designation made hereunder shall be effective only
if properly signed and dated by the Participant and delivered to the
Administrator prior to the time of the Participant's death. The most recent
Beneficiary designation received by the Administrator shall be the effective
Beneficiary designation for all Plan Years and shall supercede all prior
Beneficiary designations unless specifically designated otherwise. Any
Beneficiary designation hereunder shall remain effective until changed or
revoked hereunder.
-9-
(b) A Beneficiary designation may be changed by the Participant at
any time, or from time to time, by filing a new designation in writing with the
Administrator.
(c) If the Participant dies without having designated a
Beneficiary or a contingent Beneficiary or if the Participant dies and the
Beneficiary and contingent Beneficiary so named by the Participant have both
predeceased the Participant, then the Participant's estate shall be deemed to be
his Beneficiary. In the event that the Participant dies and the Beneficiary so
named by the Participant has predeceased the Participant, then the surviving
contingent Beneficiary, if any, shall be the Beneficiary.
(d) If a Beneficiary of the Participant shall survive the
Participant but shall die before the Participant's entire benefit under the Plan
has been distributed, then the unpaid balance thereof shall be distributed to
any other beneficiary named by the deceased Beneficiary to receive his interest
or, if none, to the estate of the deceased Beneficiary.
ARTICLE IX
Withdrawals
-----------
9.1 No Withdrawals Permitted. No withdrawals or other
distributions shall be permitted from the Deferred Cash Account and Deferred
Stock Unit Account except as specifically provided in Articles VII and IX.
9.2 Hardship Exemption.
(a) A distribution of a portion of the Participant's Deferral
Benefit because of an Unforeseeable Emergency will be permitted only to the
extent required by the Participant to satisfy the emergency need. Whether an
Unforeseeable Emergency has occurred will be determined solely by the
Administrator. Distributions in the event of an Unforeseeable Emergency may be
made by and with the approval of the Administrator upon written request by a
Participant.
(b) An "Unforeseeable Emergency" is defined as a severe financial
hardship to the Participant resulting from a sudden and unexpected illness or
accident of the Participant or of a dependent of the Participant, loss of the
Participant's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the
Participant's control. The circumstances that will constitute an Unforeseeable
Emergency will depend upon the facts of each case, but, in any event, any
distribution under this Section 9.2 shall not exceed the remaining amount
required by the Participant to resolve the hardship after (i) reimbursement or
compensation through insurance or otherwise, (ii) obtaining liquidation of the
Participant's assets, to the extent such liquidation would not itself cause a
severe financial hardship, or (iii) suspension of deferrals under the Plan.
-10-
ARTICLE X
Funding
-------
10.1 Funding.
(a) All Plan Participants and Beneficiaries are general unsecured
creditors of the Corporation with respect to the benefits due hereunder and the
Plan constitutes a mere promise by the Corporation to make benefit payments in
the future. It is the intention of the Corporation that the Plan be considered
unfunded for tax purposes.
(b) The Corporation may, but is not required to, purchase life
insurance in amounts sufficient to provide some or all of the benefits provided
under this Plan or may otherwise segregate assets for such purpose.
(c) The Corporation may, but is not required to, establish a
grantor trust which may be used to hold assets of the Corporation which are
maintained as reserves against the Corporation's unfunded, unsecured obligations
hereunder. Such reserves shall at all times be subject to the claims of the
Corporation's creditors. To the extent such trust or other vehicle is
established, and assets contributed, for the purpose of fulfilling the
Corporation's obligation hereunder, then such obligation of the Corporation
shall be reduced to the extent such assets are utilized to meet its obligations
hereunder. Any such trust and the assets held thereunder are intended to conform
in substance to the terms of the model trust described in Revenue Procedure
92-64.
ARTICLE XI
Change of Control
-----------------
11.1 Change of Control.
A "Change of Control" shall mean:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of
either (i) the then outstanding shares of common stock of the Corporation (the
"Outstanding Corporation Common Stock") or (ii) the combined voting power of the
then outstanding voting securities of the Corporation entitled to vote generally
in the election of directors (the "Outstanding Corporation Voting Securities");
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Corporation, (ii) any acquisition by the Corporation, (iii)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Corporation or any corporation controlled by the Corporation
or (iv) any acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (c) of this Section; or
-11-
(b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Corporation's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Corporation (a "Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation a corporation which as a result of such transaction owns the
Corporation or all or substantially all of the Corporation's assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination
of the Outstanding Corporation Common Stock and Outstanding Corporation Voting
Securities, as the case may be, (ii) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Corporation or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 25% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(d) Approval by the shareholders of the Corporation of a complete
liquidation or dissolution of the Corporation.
Notwithstanding the foregoing, for purposes of subsection (a) of this
Section, a Change of Control shall not be deemed to have taken place if, as a
result of an acquisition by the Corporation which reduces the Outstanding
Corporation Common Stock or the Outstanding Corporation Voting Securities, the
beneficial ownership of a Person increases to 25% or more of the Outstanding
Corporation Common Stock or the Outstanding Corporation Voting Securities;
provided, however, that if a Person shall become the beneficial owner of 25% or
more of the Outstanding Corporation Common Stock or the Outstanding Corporation
Voting Securities by reason of share purchases by the Corporation and, after
such share purchases by the Corporation, such Person becomes the beneficial
owner of any additional shares of the Outstanding
-12-
Corporation Common Stock or the Outstanding Corporation Voting Stock, for
purposes of subsection (a) of this Section, a Change of Control shall be deemed
to have taken place.
11.2 Effect of Change of Control.
(a) Upon a Change of Control, the Corporation shall
establish, if one has not been established, a grantor trust, as described in
Section 10.1(c), and shall contribute to such trust, within seven (7) days of
the Change of Control, and within thirty (30) days of the end of each Plan Year
thereafter, a lump-sum payment equal to the difference between the aggregate
value of all Participants' Accounts and the value of the assets of the trust on
the date of the Change of Control or end of the Plan Year.
(b) Notwithstanding any other provision in any other
Article of this Plan to the contrary, in the event a Participant separates from
service to the Corporation within three (3) years following a Change of Control,
other than on account of the Participant's death, Disability or Retirement, the
value of such Participant's Deferred Stock Unit Account as of the date of his
separation from service shall be paid to Participant in a lump-sum payment in
shares of the Corporation's common stock (or an Acquiring Corporation's stock,
as provided in Section 11.2(c), below) with fractional shares paid in cash and
the value of such Participant's Deferred Cash Account as of the date of his
separation from service shall be paid to Participant in a lump-sum cash payment
no later than 30 days after the date the Participant's separation from service.
(c) Upon a Change of Control, each Participant's Deferred
Stock Unit Account shall be adjusted as provided in Section 4.2(c). The amount
of such adjustment shall be determined by the Board (which, for this purpose,
shall be comprised solely of employee members of the Board prior to the Change
of Control) so as to reflect fairly and equitably appropriate circumstances as
the Board deems appropriate, including, without limitation, the recent price of
shares of the Corporation's common stock. For purposes of adjustments under this
Section 11.2(c), the value of a Participant's Deferred Stock Unit Account shall
be adjusted to the greater of (1) the Closing Price on or nearest the date on
which the Change of Control is deemed to occur, or (2) the highest per share
price for shares of the Corporation's common stock actually paid in connection
with the Change of Control. In the event the consideration received in the
Change of Control transaction by the holders of the Corporation's common stock
includes shares of stock of another corporation (an "Acquiring Corporation"),
the adjustment under this Section 11.2(c) shall include converting each Deferred
Stock Unit into units of stock of the Acquiring Corporation of the same class as
the shares received by the holders of the Corporation's common stock in the
Change of Control transaction using the same exchange ratio as the exchange
ratio used in the Change of Control transaction and such units shall be deemed
to be equivalent in value to the fair market value of such shares of the
Acquiring Corporation. Such units shall thereafter be deemed to be Deferred
Stock Units within the meaning of this Plan and accounted for and adjusted
accordingly. Any other adjustment made to a Deferred Stock Unit Account,
including an adjustment relating to other consideration received in the Change
of Control transaction by the holders of the Corporation's common stock, shall
be credited to the Participant's Deferred Cash Account.
-13-
ARTICLE XII
Plan Administrator
------------------
12.1 Appointment of Administrator.
(a) The Committee shall serve as the Administrator unless the
Committee has appointed one or more persons to serve as the Plan Administrator
(the "Administrator") for the purpose of administering the Plan. In the event
more than one person is appointed, the persons shall form a committee for the
purpose of functioning as the Administrator of the Plan. If the Committee has so
appointed an Administrator, the person or committeemen serving as Administrator
shall serve for indefinite terms at the pleasure of the Committee, and may, by
thirty (30) days prior written notice to the Committee, terminate such
appointment.
12.2 Duties and Responsibilities of Plan Administrator.
(a) The Administrator shall maintain and retain necessary records
regarding its administration of the Plan.
(b) The Administrator is empowered to settle claims against the
Plan and to make such equitable adjustments in a Participant's or Beneficiary's
rights or entitlements under the Plan as it deems appropriate in the event an
error or omission is discovered or claimed in the operation or administration of
the Plan as provided in Section 12.3.
(c) The Administrator has the authority in its sole judgment and
discretion to construe the Plan, correct defects, supply omissions or reconcile
inconsistencies to the extent necessary to effectuate the Plan, and such action
shall be conclusive and binding on all Participants.
12.3 Claims Procedures.
(a) Any claim by a Participant or his or her Beneficiary
(hereafter the "Claimant") for benefits shall be submitted in writing to the
Administrator. The Administrator shall be responsible for deciding whether such
claim is payable, or the claimed relief otherwise is allowable, under the
provisions and rules of the Plan (a "Covered Claim"). The Administrator
otherwise shall be responsible for providing a full review of the
Administrator's decision with regard to any claim, upon a written request.
(b) Each Claimant or other interested person shall file with the
Administrator such pertinent information as the Administrator may specify, and
in such manner and form as the Administrator may specify; and, such person shall
not have any rights or be entitled to any benefits, or further benefits,
hereunder, as the case may be, unless the required information is filed by the
Claimant or on behalf of the Claimant. Each Claimant shall supply, at such times
and in such manner as may be required, written proof that the benefit is covered
under the Plan. If it is determined that a Claimant has not incurred a Covered
Claim or if the Claimant shall fail to furnish such proof as is requested, no
benefits, or no further benefits, hereunder, as the case may be, shall be
payable to such Claimant.
-14-
(c) Notice of any decision by the Administrator with respect to a
Claim generally shall be furnished to the Claimant within ninety (90) days
following the receipt of the claim by the Administrator (or within ninety (90)
days following the expiration of the initial ninety (90) day period in any case
where there are special circumstances requiring extension of time for processing
the claim). If special circumstances require an extension of time for processing
the claim, written notice of the extension shall be furnished by the
Administrator to the Claimant.
(d) Commencement of benefit payments shall constitute notice of
approval of a claim to the extent of the amount of the approved benefit. If such
claim shall be wholly or partially denied, such notice shall be in writing. If
the Administrator fails to notify the Claimant of the decision regarding his or
her claim in accordance with the "Claims Procedure" provisions, the claim shall
be deemed "denied"; and, the Claimant then shall be permitted to proceed with
the claims review procedure provided for herein.
(e) Within sixty (60) days following receipt by the Claimant of
notice of the claim denial, or within sixty (60) days following the date of a
deemed denial, the Claimant may appeal denial of the claim by filing a written
application for review with the Administrator. Following such request for
review, the Administrator shall fully review the decision denying the claim. The
decision of the Administrator then shall be made within sixty (60) days
following receipt by the Administrator of a timely request for review (or within
one hundred and twenty (120) days after such receipt, in a case where there are
special circumstances requiring an extension of time for reviewing such denied
claim). The Administrator shall deliver its decision to the Claimant in writing.
If the decision on review is not furnished within the prescribed time, the claim
shall be deemed "denied" on review.
(f) For all purposes under the Plan, the decision with respect to
a claim (if no review is requested) and the decision with respect to a claims
review (if requested), shall be final, binding and conclusive on all
Participants, Beneficiaries and other interested parties, as to all matters
relating to the Plan and Plan benefits. Further, each claims determination under
the Plan shall be made in the absolute and exclusive discretion and authority of
the Committee.
ARTICLE XIII
Amendment or Termination of Plan
--------------------------------
13.1 Amendment or Termination of the Plan. The Plan may be
terminated or amended at any time by the Board, or its authorized delegate,
effective as of any date specified. Any such action taken by the Board, or its
authorized delegate, shall be evidenced by a resolution and shall be
communicated to Participants and Beneficiaries prior to the effective date
thereof. No amendment or termination shall decrease a Participant's Deferral
Benefit accrued prior to the effective date of the amendment or termination. The
Board, or its authorized delegate, reserves the right to unilaterally shorten
the Deferral Period of any Participant hereunder in its sole discretion if, in
its sole discretion, it determines that to do so will be fair and equitable to
the Participant.
-15-
ARTICLE XIV
Miscellaneous
-------------
14.1 Non-assignability. The interests of each Participant under the
Plan are not subject to claims of the Participant's creditors; and neither the
Participant nor his Beneficiary shall have any right to sell, assign, transfer
or otherwise convey the right to receive any payments hereunder or any interest
under the Plan, which payments and interest are expressly declared to be
non-assignable and non-transferable.
14.2 Notices and Elections. All notices required to be given in
writing and all elections required to be made in writing under any provision of
the Plan shall be invalid unless made on such forms as may be provided or
approved by the Administrator and, in the case of a notice or election by a
Participant or Beneficiary, unless executed by the Participant or Beneficiary
giving such notice or making such election. Notices and elections shall be
deemed given or made when received by any member of the committee that serves as
Administrator.
14.3 Delegation of Authority. Whenever the Corporation is permitted
or required to perform any act, such act may be performed by its Chief Executive
Officer or President or other person duly authorized by its Chief Executive
Officer or President or its Board.
14.4 Service of Process. The Administrator shall be the agent for
service of process on the Plan.
14.5 Governing Law. The Plan shall be construed, enforced and
administered in accordance with the laws of the Commonwealth of Virginia.
14.6 Binding Effect. The Plan shall be binding upon and inure to
the benefit of the Corporation, its successors and assigns, and the Participant
and his heirs, executors, administrators and legal representatives.
14.7 Severability. If any provision of the Plan should for any
reason be declared invalid or unenforceable by a court of competent
jurisdiction, the remaining provisions shall nevertheless remain in full force
and effect.
14.8 Gender and Number. In the construction of the Plan, the
masculine shall include the feminine or neuter and the singular shall include
the plural and vice-versa in all cases where such meanings would be appropriate.
14.9 Titles and Captions. Titles and captions and headings herein
have been inserted for convenience of reference only and are to be ignored in
any construction of the provisions hereof.
-16-