<PAGE>
EXHIBIT 10.17
HCC INSURANCE HOLDINGS, INC.
NONQUALIFIED DEFERRED COMPENSATION PLAN
FOR STEPHEN L. WAY
<PAGE>
HCC INSURANCE HOLDINGS, INC.
NONQUALIFIED DEFERRED COMPENSATION PLAN
FOR STEPHEN L. WAY
Table of Contents
Page
----
ARTICLE 1 - DEFINITIONS
.....................................................1
ARTICLE 2 -
ELIGIBILITY......................................................2
ARTICLE 3 -
CONTRIBUTIONS....................................................3
ARTICLE 4 - CREDITING OF CONTRIBUTIONS AND
INCOME............................3
ARTICLE 5 - PAYMENT OF BENEFITS - DEATH,
DISABILITY, OR RETIREMENT...........3
ARTICLE 6 - OTHER PAYMENT OF
BENEFITS........................................4
ARTICLE 7 - ADMINISTRATION OF THE
PLAN.......................................5
ARTICLE 8 - CLAIM REVIEW
PROCEDURE...........................................6
ARTICLE 9 - LIMITATION OF
RIGHTS.............................................7
ARTICLE 10 - LIMITATION OF
ASSIGNMENT........................................7
ARTICLE 11 - AMENDMENT TO OR TERMINATION OF
THE PLAN.........................8
ARTICLE 12 - STATUS OF PARTICIPANT AS
UNSECURED CREDITOR.....................8
ARTICLE 13 - GENERAL AND
MISCELLANEOUS.......................................8
<PAGE>
HCC INSURANCE HOLDINGS, INC.
NONQUALIFIED DEFERRED COMPENSATION PLAN
FOR STEPHEN L. WAY
PREAMBLE
WHEREAS, the Company desires to establish a nonqualified
deferred
compensation plan for the exclusive benefit
of Stephen L. Way (the
"Participant"), who is the Chief Executive
Officer and Chairman of the Board of
the Company, to allow the Company to pay a
portion of the Participant's
compensation on a deferred basis by making
Contributions to the Plan on his
behalf;
WHEREAS, the Company intends that the Participant and his
Beneficiary
under the Plan shall have the status of
unsecured general creditors of the
Company with respect to the Plan and that
the Plan shall constitute an unfunded
plan maintained primarily for the purpose
of providing deferred compensation for
a select key management and highly
compensated employee within the meaning of
section 201(2) and similar provisions of
ERISA;
NOW, THEREFORE, the Company hereby establishes the HCC
Insurance
Holdings, Inc. Nonqualified Deferred
Compensation Plan for Stephen L. Way,
effective as of the Effective Date.
ARTICLE 1
DEFINITIONS
1.1 "Account" shall mean the record maintained by the Committee
showing
the monetary value of the individual
interest in the Plan of the Participant.
The term "Account" shall refer only to a
bookkeeping entry and shall not be
construed to require the segregation of
assets on behalf of the Participant.
1.2 "Accrual Date" shall mean the date on which a Company
Contribution
is deemed to be made to the Participant's
Account and shall be specified for
each Company Contribution hereunder in the
Board action approving such
Contribution. The Accrual Date is relevant
for purposes of interest accrual
hereunder.
1.3 "Affiliate" shall mean a member of the controlled group of
corporations (as defined in section 1563 of
the Code) of which the Company is a
member.
1.4 "Beneficiary" shall mean the beneficiary or beneficiaries
(including any contingent beneficiary or
beneficiaries, if applicable)
designated by the Participant to receive
death benefits, if any, hereunder. Such
designation shall be effected by delivery
to the Committee of a written
beneficiary designation, on a form provided
by the Committee for that purpose.
1
<PAGE>
1.5 "Board" shall mean the Board of Directors of the Company.
1.6 "Code" shall mean the Internal Revenue Code of 1986, as it may
be
amended from time to time, and the rules
and regulations promulgated thereunder.
1.7 "Committee" shall mean the Compensation Committee of the Board
or,
if none, the Board.
1.8 "Company" shall mean HCC Insurance Holdings, Inc., a
Delaware
corporation, or its successor or
successors.
1.9 "Contribution" shall mean a bookkeeping entry which reflects
the
periodic accrual, if any, approved by the
Board on the Participant's behalf, as
provided in Article 3 hereof.
1.10 "Disability" shall mean a physical or mental condition,
the
occurrence of which shall entitle the
Participant to benefits under the
long-term disability plan maintained by the
Company or an Affiliate, if
applicable, for the benefit of eligible
employees of the Company and its
Affiliates. If no such long-term disability
plan exists, "Disability" shall be
defined as in Code section 72(m)(7).
1.11
"Effective Date" shall mean January 1, 2003.
1.12 "ERISA" shall mean the Employee Retirement Income Security Act
of
1974, as it may be amended from time to
time, and the rules and regulations
promulgated thereunder.
1.13 "Participant" is defined in the above Preamble.
1.14 "Plan" shall mean this HCC Insurance Holdings, Inc.
Nonqualified
Deferred Compensation Plan for Stephen L.
Way, as amended from time to time.
1.15 "Plan Year" shall mean the annual period beginning January 1
and
ending December 31, both dates inclusive of
each year.
ARTICLE 2
ELIGIBILITY
The only individual eligible to participate under the Plan is
Stephen
L. Way. He shall be eligible to participate
only while he is an employee of the
Company and/or its Affiliates.
2
<PAGE>
ARTICLE 3
CONTRIBUTIONS
The
Committee shall recommend to the Board the amount and timing of
the
Company Contribution or Contributions, if
any, for a Plan Year. Any such
recommendation of the Committee shall be
effective only upon approval of the
Board, which approval shall specify the
Accrual Date for each such Contribution.
Contributions shall be accrued by the
Company or an Affiliate as directed by the
Committee. No additional Contributions may
be accrued after the Participant
ceases to be eligible to participate in the
Plan.
ARTICLE 4
CREDITING OF CONTRIBUTIONS AND INCOME
4.1 Contributions by the Company under Article 3 hereof shall
be
credited to the Account of the Participant
as of the Accrual Date specified by
the Board. All withdrawals and
distributions from the Account pursuant to
Articles 5 or 6, respectively, shall be
charged against the Account as of the
date of such withdrawal or
distribution.
4.2 The Participant's Account shall earn interest each calendar
quarter
at an annual rate that is equivalent to the
sum of (i) the Prime Rate as
published in the Money Rates section of The
Wall Street Journal as of the last
day of each calendar quarter plus (ii) one
percent (100 basis points); such rate
prorated to reflect quarterly compounding.
Such interest accruals shall be
credited to the Participant's Account as of
the last day of each calendar
quarter or at such other time as is
determined by the Committee. If a
distribution or withdrawal occurs hereunder
before the last day of a calendar
quarter, a prorated interest accrual shall
be credited to the Participant's
Account as of the date of such distribution
or withdrawal. If a Contribution is
made with an Accrual Date other than the
first day of the calendar quarter, a
prorated interest accrual for such quarter
shall be credited with respect to the
amount of the Contribution.
ARTICLE 5
PAYMENT OF BENEFITS - DEATH, DISABILITY, OR RETIREMENT
5.1 In the event
of the Participant's death, his Beneficiary shall be
entitled to the entire value of all amounts
credited to the Participant's
Account as of the date of distribution to
the Beneficiary. Payment of such death
benefit shall be made in a lump sum cash
payment to the Beneficiary as soon as
administratively practicable after the
Committee's receipt of proper notice of
the Participant's death. The Beneficiary
may not elect to defer the date of
distribution or change the form of payment
of the distribution. If the
Participant fails to name a Beneficiary, or
if all Beneficiaries (primary and
contingent) named by the Participant
predecease him, the entire death benefit
shall be paid to the Participant's
estate.
3
<PAGE>
5.2 Upon the Participant's Disability, he shall be entitled to
the
entire value of all amounts credited to his
Account, as of the date of
distribution to the Participant. Payment of
the Participant's Disability benefit
shall be made in a lump sum cash payment to
the Participant as soon as
administratively practicable after the
Committee's determination of the
Participant's Disability. The Participant
may not elect to defer the date of
such distribution or change the form of
payment of the distribution.
5.3 Upon the Participant's retirement or termination of employment
with
the Company and its Affiliates for any
reason other than death or Disability,
the Participant shall be entitled to the
entire value of all amounts credited to
his Account, as of the date of distribution
to the Participant. Payment of the
Participant's benefit on account of his
retirement or other termination of
employment shall be made in a lump sum cash
payment to the Participant as soon
as administratively practicable after his
retirement or other termination of
employment. The Participant may not elect
to defer the date of such distribution
or change the form of payment of the
distribution.
5.4 Notwithstanding any of the foregoing provisions, all payments
under
this Article 5 shall be subject to the
limi
