ALLIED WORLD ASSURANCE COMPANY (U.S.) INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLANEmployee Benefits Plan Agreement |
|
|
You are currently viewing: This Employee Benefits Plan Agreement involves
ALLIED WORLD ASSURANCE CO HOLDINGS LTD. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
Search Employee Benefits Plan Agreement by:
Exhibit 10.1
ALLIED WORLD ASSURANCE COMPANY (U.S.) INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(Effective as of January 1, 2005)
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
Page |
||
|
PURPOSE |
|
|
|
|
1 |
|
|
ARTICLE 1 |
|
DEFINITIONS |
|
|
1 |
|
|
ARTICLE 2 |
|
SELECTION AND ENROLLMENT |
|
|
6 |
|
|
ARTICLE 3 |
|
DEFERRAL OF COMPENSATION |
|
|
7 |
|
|
ARTICLE 4 |
|
EMPLOYER CONTRIBUTIONS |
|
|
9 |
|
|
ARTICLE 5 |
|
SHORT-TERM PAYOUT AND UNFORESEEABLE FINANCIAL EMERGENCIES |
|
|
10 |
|
|
ARTICLE 6 |
|
BENEFIT DISTRIBUTIONS |
|
|
11 |
|
|
ARTICLE 7 |
|
FORFEITURE |
|
|
12 |
|
|
ARTICLE 8 |
|
BENEFICIARY DESIGNATION |
|
|
12 |
|
|
ARTICLE 9 |
|
LEAVE OF ABSENCE |
|
|
13 |
|
|
ARTICLE 10 |
|
TERMINATION, AMENDMENT AND MODIFICATION |
|
|
13 |
|
|
ARTICLE 11 |
|
ADMINISTRATION |
|
|
14 |
|
|
ARTICLE 12 |
|
CLAIMS PROCEDURES |
|
|
15 |
|
|
ARTICLE 13 |
|
TRUST |
|
|
16 |
|
|
ARTICLE 14 |
|
MISCELLANEOUS |
|
|
16 |
|
-i-
ALLIED WORLD ASSURANCE COMPANY (U.S.) INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Purpose
The purpose of the Allied World Assurance Company (U.S.) Inc. Supplemental Executive Retirement Plan is to provide specified Benefits to a select group of senior management who contribute materially to the continued growth, development and future business success of Allied World Assurance Company (U.S.) Inc., a Delaware corporation, or its Affiliates. The Plan is intended to comply with Section 409A and shall be interpreted and administered, as necessary, to comply with such provisions. The Plan is also intended to permit Affiliates (as defined below) of Allied World Assurance Company (U.S.) Inc. to provide benefits to eligible Participants (as defined below) under one supplemental executive retirement plan. Accordingly, effective as of January 1, 2005, the Newmarket Underwriters Insurance Company Supplemental Executive Retirement Plan (the “NUIC SERP”) and the Allied World Assurance Company, Ltd Supplemental Executive Retirement Plan (the “AWAC SERP”) shall be combined with and merged into the Plan, and the NUIC SERP and AWAC SERP shall cease to be operative as of such date. The trusts under the NUIC SERP and AWAC SERP have been transferred to the Trust (as defined below) under the Plan.
Article 1
Definitions
Unless otherwise clearly apparent from the context, the following phrases and terms shall have the meanings indicated:
1.1 “ Account ” shall mean, with respect to a Participant, any or all of a Participant’s Deferral Account or Employer Contribution Account.
1.2 “ Affiliates ” shall mean an affiliate within the meaning of Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
1.3 “ Annual Deferral Amount ” shall mean for any Plan Year the portion of a Participant’s Earnings that is deferred pursuant to Article 3.
1.4 “ Annual Installment Method ” shall mean a method of distributing the balance in a Participant’s Account wherein such balance is distributed in annual installments up to ten years, as elected by the Participant (the “Installment Period”). The amount of each annual installment shall be computed as follows: the amount of each annual installment shall equal (i) the vested balance in the Account, as of the Measurement Date immediately preceding the date the installment is paid, divided by (ii) the number of years remaining in the Installment Period. For purposes hereof, “Measurement Date” shall mean the first day of the month next preceding the date on which the annual installment is paid or such other date (determined by the Committee) as of which the vested balance in an Account is determined, provided, that in no event shall the amount of any annual installment exceed the vested balance in the Participant’s Account as of the date on which any such installment is paid.
-1-
1.5 “ Appeals Committee ” shall mean the committee designated to hear appeals pursuant to Section 12.3.
1.6 “ Beneficiary ” shall mean one or more persons, trusts, estates or other entities, designated in accordance with Article 8, that are entitled to receive Benefits upon the death of a Participant.
1.7 “ Beneficiary Designation Form ” shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to designate one or more Beneficiaries.
1.8 “ Benefit ” or “ Benefits ” shall mean the vested balance of a Participant’s Account payable under the Plan.
1.9 “ Board ” shall mean the board of directors of the Company.
1.10 “ Change in Control ” shall mean and be deemed to occur if:
|
(a) |
|
any “person” (as such term is defined in Section 3(a)(9) and as used in Sections 13(d) and 14(d) of the Exchange Act), excluding the Parent Company or any or its subsidiaries, a trustee or any fiduciary holding securities under an employee benefit plan of the Parent Company or any of its subsidiaries, an underwriter temporarily holding securities pursuant to an offering of such securities or a corporation owned, directly or indirectly, by shareholders of Parent Company in substantially the same proportion as their ownership of Parent Company, is or becomes the “beneficial owner” as defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of securities of Parent Company representing 50% or more of the combined voting power of Parent Company’s then outstanding securities (“ Voting Securities ”); |
|
|
|
|
|
(b) |
|
during any period of not more than two years, individuals who constitute the Board of Parent Company as of the beginning of the period and any new director (other than a director designated by a person who has entered into an agreement with Parent Company to effect a transaction described in paragraphs (a) or (c) of this Section 1.10) whose election by the Board or nomination for election by Parent Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at such time or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; |
|
|
|
|
|
(c) |
|
the shareholders of Parent Company approve a merger, consolidation, amalgamation or reorganization or a court of competent jurisdiction approves a scheme of arrangement of Parent Company, other than a merger, consolidation, amalgamation, reorganization or scheme of arrangement which would result in the Voting Securities of Parent Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 50% of the combined voting power of the Voting Securities of Parent Company or such surviving entity outstanding immediately after such merger, consolidation, amalgamation, reorganization or scheme of arrangement; |
-2-
|
(d) |
|
the shareholders of Parent Company approve a plan of complete liquidation of Parent Company or any agreement for the sale or disposition by Parent Company of all or substantially all of its assets; |
|
|
|
|
|
(e) |
|
with respect to any Employer, a Change in Control would occur applying the rules in clause (a) hereof as if such Employer were the Parent Company, which Change in Control shall apply only to Employees of any such Employer; or |
|
|
|
|
|
(f) |
|
with respect to any Employer, the shareholders of the Employer approve any agreement for the sale or disposition by such Employer to an unrelated party of all or substantially all of its assets, which Change in Control shall apply only to Employees of any such Employer. |
1.11 “ Claimant ” shall have the meaning set forth in Section 12.1.
1.12 “ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time.
1.13 “ Committee ” shall mean the committee designated to administer the Plan as described in Article 11.
1.14 “ Company ” shall mean Allied World Assurance Company (U.S.) Inc. and any successor to all or substantially all of the Company’s assets or business.
1.15 “ Deferral Account ” shall mean, with respect to any Participant, an account to which shall be credited the Participant’s Annual Deferral Amounts, and any income, gains and losses attributable thereto, less any amounts distributed to the Participant or his Beneficiary that relate to such Deferral Account. The Deferral Account balance shall be a bookkeeping entry only and shall be utilized solely for the measurement and determination of the amounts to be paid to a Participant or his Beneficiary pursuant to the Plan.
1.16 “ Disability ” or “ Disabled ” shall mean, with respect to any Participant, an inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. The Participant shall be deemed Disabled if determined to be (i) totally disabled by the Social Security Administration or (ii) disabled under a Company sponsored disability insurance program, provided such program’s definition of disability complies with Section 409A.
1.17 “ Distribution Event ” shall mean the earlier of a Participant’s Retirement, Disability, Termination of Employment, death or a Change in Control, the occurrence of which entitles the Participant (or his Beneficiary, as the case may be) to Benefits in accordance with Article 6.
1.18 “ Domestic Partner ” shall mean a person who has formed a domestic partnership with a Participant where such partnership has been in existence throughout the one-year period ending on the earlier of the Participant’s date of death or the date distribution of his Benefits commences. A domestic partnership is: (i) a relationship between two adults of the same or opposite gender, which includes residing together and being jointly responsible for each other’s
-3-
common welfare and financial obligations, where the Participant has attested to meeting certain criteria for domestic partnership as determined from time to time by the Committee in accordance with applicable law; or (ii) a domestic partnership that has been registered with a governmental entity pursuant to State or local law authorizing such registration.
1.19 “ Earnings ” means the payments expressed in monetary terms and paid (directly or indirectly) to the Participant by the Employer of any wages, salary or leave pay up to a maximum of $200,000 per year or such higher maximum per year as the Employer shall in its absolute discretion determine, but does not include any of the following: (i) any fee or commission; or (ii) any bonus, including payments from a profit-sharing scheme, housing benefit, cost of living allowance or other perquisite paid to a Participant; or (iii) overtime payments, severance payments, retirement or long-service recognition payments or health insurance premiums.
1.20 “ Election Form ” shall mean the form established from time to time by the Committee for Participants to make elections under the Plan. A Participant must complete and submit a new Election Form for each Plan Year in which a Participant elects to defer a portion of his Earnings and indicate the form and time at which amounts deferred during such Plan Year are to be distributed. The Subsequent Election Limitations applies independently to each such Election Form.
1.21 “ Employee ” shall mean a person who is subject to U.S. income tax and is an employee of any Employer.
1.22 “ Employer ” shall mean the Company or any Affiliate of the Company that has been selected by the Company to participate in the Plan.
1.23 “ Employer Contribution ” means the amount the Employer contributes to the Plan pursuant to Section 4.1 hereof for each Plan Year.
1.24 “ Employer Contribution Account ” shall mean, with respect to any Participant, an account to which shall be credited the Employer Contributions pursuant to Section 4.1, and any income, gains and losses attributable thereto, less any amounts distributed to the Participant or his Beneficiary that relate to such Account. The Employer Contribution Account balance shall be a bookkeeping entry only and shall be utilized solely for the measurement and determination of the amounts to be paid to a Participant or his Beneficiary.
1.25 “ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.
1.26 “ Key Employee ” shall mean an Employee treated as a “specified employee” under Code Section 409A(a)(2)(B)(i), i.e., a key employee of the Company (as defined in Code Section 416(i) without regard to paragraph (5) thereof), which is defined as an employee who, at any time during the year, is (i) an officer of the Company having annual compensation in excess of $130,000 (indexed), (ii) a five percent owner of the Parent Company, or (iii) a one percent owner of the Parent Company having annual compensation of more than $150,000. For purposes of clause (i), no more than 50 employees (or, if lesser, the greater of three or ten percent of the employees) shall be treated as officers. The Committee shall determine which Employees shall be deemed Key Employees using December 31 st as an identification date.
-4-
1.27 “ Key Employee Limitation ” shall mean the following limitation, which is intended to comply with Section 409A. Notwithstanding any Election Form to the contrary, distribution of the Benefit payable by reason of a Participant’s Termination of Employment or Retirement to a Participant who is a Key Employee shall not be made before six months after such separation from service (or, if earlier, the Participant’s date of death). At the end of such six-month period, payments that would have been payable but for the Key Employee Limitation shall be paid in lump sum on the first day of the seventh month following the Participant’s Termination of Employment or Retirement and remaining payments shall commence as indicated on the relevant Election Forms.
1.28 “ Parent Company ” shall mean Allied World Assurance Company Holdings, Ltd and any successor to all or substantially all of its assets or business.
1.29 “ Participant ” shall mean any Employee (i) who is selected to participate in the Plan, (ii) who timely submits a signed Election Form to the Committee, and (iii) who commences participation in the Plan. A spouse or former spouse of a Participant shall not be treated as a Participant or have an Account balance, even if such spouse or former spouse has an interest in the Participant’s Benefits as a result of applicable law or property settlements resulting from legal separation, divorce or dissolution of the domestic partnership.
1.30 “ Plan ” shall mean the Allied World Assurance Company (U.S.) Inc. Supplemental Executive Retirement Plan, which shall be evidenced by this instrument, as it may be amended from time to time.
1.31 “ Plan Year ” shall mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year.
1.32 “ Retirement ”, “ Retire(s) ”, “ Retiring ” or “ Retired ” shall mean, with respect to an Employee, a voluntary severance from employment from any Employers participating in the Plan (for any reason other than a leave of absence, death or Disability) on or after the attainment of age sixty five (65).
1.33 “ Section 409A ” shall mean Code Section 409A, as the same may be amended from time to time, and any successor statute to such section of the Code.
1.34 “ Short-Term Payout ” shall mean the Benefit set forth in Section 5.1.
1.35 “ Subsequent Election Limitations ” shall mean the following limitations applicable to any Participant’s subsequent election to delay receipt of Benefits or to change the form of such payment: (i) such election may not take effect until at least 12 months after the date on which the election is made; (ii) with respect to an election related to Benefits payable for reasons other than death, Disability or Unforeseeable Emergency, no payments specified in a subsequent election may be made during the five-year period commencing on the date distribution of benefits would have commenced but for such subsequent election; and (iii) with respect to a subsequent election related to Benefits payable pursuant to a fixed schedule or payable at a specified time, such election may not be made less than 12 months prior to the date of the first scheduled payment. For purposes hereof, installment payments shall be treated as a single payment.
-5-
1.36 “ Termination of Employment ”, “ Terminate Employment ” or “ Terminating Employment ” shall mean the severing of employment with any Employer participating in the Plan, voluntarily or involuntarily, for any reason other than Retirement, Disability, death or an authorized leave of absence, provided the Employee does not remain employed with any other Employer.
1.37 “ Trust ” shall mean the Trust Agreement under the Allied World Assurance Company (U.S.) Inc. Supplemental Executive Retirement Plan with Reliance Trust Company effective as of December 31, 2006, as amended from time to time, and any successor trust thereto.
1.38 “ Unforeseeable Emergency ” shall mean a severe financial hardship to a Participant resulting from an illness or accident of the Participant, the Participant’s spouse or a dependent (within the meaning of Code Section 152(a)) 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 control of the Participant, or such other circumstances or events, if any, that are included within the meaning of “unforeseeable emergency” under Section 409A.
Article 2
Selection and Enrollment
2.1 Selection of Participants by Committee . Participants shall be limited to a select group of senior management Employees, as determined by the Committee.
2.2 Initial Enrollment Requirements . As a condition to participation, each Participant shall complete, execute and return to the Committee, an Election Form, with respect to services performed subsequent to such election, within 30 days after being selected to participate in the Plan. Any Participant may, on or before December 31, 2007, change his elections with respect to amounts deferred under the Plan on or before December 31, 2007; provided that such election may not apply to payments that would otherwise be payable in 2007 or cause payments to be made in 2007 that would otherwise be payable in a later year. The Committee shall establish from time to time such other enrollment requirements as it determines are necessary, convenient or appropriate to carry out any of the purposes or the intent of the Plan or to better assure the Plan’s compliance with Section 409A. Participation shall commence as soon as practicable following timely receipt of all required enrollment materials.
2.3 Termination of Participation and/or Deferrals . Any Employee who becomes a Participant shall remain a Participant until the earliest to occur of his Termination of Employment, Disability, Retirement or death. However, if the Committee determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Participant’s participation in the Plan will cease on December 31 st of the Plan Year in which such determination is made.
-6-
Article 3
Deferral of Compensation
3.1 Amount of Deferral . Subject to Section 3.2, each Plan Year a Participant may elect to defer his Earnings in one percent (1%) increments up to a maximum percentage of twenty-five percent (25%) of such Earnings or as shall otherwise be determined for each Participant by the Committee in its sole discretion. Except as otherwise provided herein, any such election shall be irrevocable.
3.2 Election to Defer . Except as provided below, each Plan Year a Participant may make an irrevocable deferral election, by timely delivering an Election Form to the Committee, in accordance with its rules and procedures, before the end of the Plan Year preceding the Plan Year for which the election is made. If no such Election Form is timely delivered for a Plan Year, the Annual Deferral Amount shall be zero for that Plan Year. Such Election Form shall indicate the form and time at which amounts deferred during such Plan Year are to be distributed. Subject to the Subsequent Election Limitations, such distribution election shall govern the deferred amounts.
3.3 Withholding of Annual Deferral Amounts . For each Plan Year, the Annual Deferral Amount shall be withheld from each regularly scheduled Employer payroll in equal amounts, as adjusted from time to time for changes in Earnings. Any Earnings not paid in scheduled payroll shall be withheld at the time the Earnings are or otherwise would be paid to the Participant.
3.4 Investment of Trust Assets . The trustee of the Trust shall be authorized, upon written instructions received from the Committee or an investment manager appointed by the Committee, to invest and reinvest the assets of the Trust in accordance with the applicable Trust Agreement, including the disposition of stock and reinvestment of the proceeds in one or more investment vehicles designated by the Committee.
3.5 Vesting of Deferral and Employer Contributions Accounts . A Participant shall at all times be 100% vested in his Deferral Account. A Participant’s vested interest in his Employer Contribution Account shall be determined under Section 4.3.
3.6 Crediting/Debiting of Account Balances . Amounts shall be credited or debited to a Participant’s Account in accordance with the following rules:
3.6.1 Election of Measurement Funds . A Participant, in connection with his initial deferral election pursuant to Section 2.2, shall elect, on an Election Form, one or more Measurement Funds (defined in Section 3.6.3) to be used to determine the additional amounts to be credited to his Account. Once each calendar month, a Participant may change the Measurement Fund(s) to be used to determine the additional amounts to be credited to his Account, or the portion of his Account allocated to each previously or newly elected Measurement Fund.
3.6.2 Proportionate Allocation . In making an election described in Section 3.6.1, the Participant shall specify on the Election Form, in increments of one percentage point
-7-
(1%), the percentage of his Account to be allocated to a Measurement Fund (as if the Participant was making an investment in that Measurement Fund with that portion of his Account).
3.6.3 Measurement Funds . The Participant may elect one or more of the measurement funds selected by the Committee (the “Measurement Funds”) for the purpose of crediting a
