THE PHILADELPHIA INSURANCE COMPANIES 2007 CASH BONUS PLANEmployee Bonus Plan Agreement |
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THE PHILADELPHIA INSURANCE COMPANIES
2007 CASH BONUS PLAN
Effective as of January 1, 2007
1. PURPOSE
The purpose of the Plan, as adopted by the
Board, subject to shareholder approval, is to provide performance-based cash
bonus compensation for key executives based on the attainment of one or more
performance goals or targets that are related to the financial success of the
Company, and that are established from time to time by the Committee, as part
of an integrated compensation program which is intended to assist the Company
in motivating and retaining employees of superior ability, industry and
loyalty.
2. DEFINITIONS
The following words and phrases as used
herein shall have the following meanings, unless a different meaning is plainly
required by the context:
(a) “Board” or “Board
of Directors” shall mean the board of directors of the Company.
(b) “Bonus Base”
shall mean a percentage of a Participant’s base salary in effect for the
Plan Year that may be any percentage between zero percent (0%) and one hundred
percent (100%). For these purposes, the Participant’s base salary for the
Plan Year shall be the Participant’s actual annual base salary, unless
otherwise specified by the Committee when establishing the Maximum Percentage
Schedule for the Plan Year.
(c) “Code” shall
mean the Internal Revenue Code of 1986, as amended, or any successor thereto.
(d) “Committee”
shall mean the Compensation Committee of the Board of Directors, or such other
committee established by the Board, in any case consisting exclusively of two
or more Outside Directors, to act as the Committee with respect to the Plan, or
such other committee as may be appointed by the Board of Directors to act as
the Committee with respect to the Plan.
(e) “Company” shall
mean Philadelphia Consolidated Holding Corp., a Pennsylvania corporation, and
any successor thereto, and shall also, except as otherwise required by the
context, include any other affiliated employer whose employees are designated
by the Committee as a Participant in the Plan.
(f) “Covered Employee”
means an employee who is a “covered employee” as that term is
defined in Code Section 162(m) and regulations promulgated thereunder.
(g) “Designated
Beneficiary” shall mean the person, if any, specified in writing by
the Participant to receive any payments due to the Participant in the event of
the Participant’s death. In the event no person is specified by the
Participant, the Participant’s estate shall be deemed to be the
Designated Beneficiary.
(h) “Effective Date”
shall mean January 1, 2007.
(i) “Outside Director”
shall mean a member of the Board of Directors who is treated as an
“outside director” for purposes of Code Section 162(m).
(j) “Maximum
Percentage” shall mean the percentage determined by reference to the
Maximum Percentage Schedule established for each Plan Year by the Committee,
which percentage may not exceed two hundred percent (200%).
(k) “Maximum Percentage
Schedule” shall mean the schedule pursuant to which a determination of
the Participant’s Maximum Percentage is determined, based on the extent
to which the performance goal or goals set forth therein have been achieved
during the Plan Year, which schedule can be varied on a Participant by
Participant basis, all as established at the discretion of the Committee.
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(l) “Participant”
shall mean those executives the Committee determines are or are reasonably
likely to be Covered Employees and who are designated by the Committee to
participate in the Plan from time to time.
(m) “Performance-Based
Bonus” shall mean the cash bonus payable to a Participant under
Section 6(a).
(n) “Performance Based
Compensation Rules” shall mean those provisions of Code
Section 162(m) and regulations promulgated thereunder that provide the
rules pursuant to which compensation that is paid to executives on the basis of
performance is exempt from the limitations on deductibility applicable to
certain compensation paid to executives in excess of $1,000,000.
(o) “Plan” shall
mean The Philadelphia Insurance Companies 2007 Cash Bonus Plan.
(p) “Plan Year”
shall mean the taxable year of the Company.
3. PARTICIPATION
Those key executives as may be designated
by the Committee to participate in the Plan from time to time are the participants
in the Plan. Participants under the Plan for each Plan Year shall be specified
no later than the time the Maximum Percentage Schedule (as described in
Section 6(a) below) is established by the Committee, and may be set forth
as part of that Schedule.
4. TERM OF PLAN
Subject to approval of the Plan by the
shareholders of the Company, the Plan shall be in effect as of the Effective
Date, and shall continue until terminated by the Board of Directors.






