Exhibit 10.17
ARTHUR J. GALLAGHER &
CO.
SEVERANCE
PLAN
(effective September 15,
1997,
as amended and restated effective
January 1, 2009)
ARTHUR J. GALLAGHER &
CO. (ILLINOIS) previously
adopted the ARTHUR J. GALLAGHER & CO. SEVERANCE
PLAN (hereinafter the “Plan”), effective
September 15, 1997 for the benefit of eligible employees of
the Employer. The Plan is hereby amended and restated, effective
January 1, 2009. For purposes of this Plan,
“Employer” means Arthur J. Gallagher & Co.
(the “Company”), each United States affiliate of the
Company, and each wholly-owned United States subsidiary of the
Company which adopts this Plan with the written consent of the
President of the Company.
The Plan is an unfunded welfare
benefit plan for purposes of the Employee Retirement Income
Security Act of 1974, as amended (hereinafter “ERISA”)
and a severance pay plan within the meaning of United States
Department of Labor regulations section 2510.3-2(b). The Plan
supersedes any prior Employer severance plans, programs or policies
covering eligible employees, both formal and informal.
The purpose of the Plan is to
provide an “eligible employee” (as hereinafter defined)
with severance pay for a specified period of time in the event that
his/her employment is involuntarily terminated by the Employer for
lack of work, rearrangement of work, or reduction in workforce, as
determined in the sole discretion of the Company’s Vice
President & Chief Human Resources Officer. As used herein,
the term “Vice President & Chief Human Resources
Officer” shall include any person serving as the officer of
the Company principally responsible for the Company’s human
resource or personnel functions.
“Eligible employee”
means a person in an employee-employer relationship with the
Employer who is classified by the Employer as either a regular
full-time employee or a regular part-time employee, but excluding
(i) any employee covered by an agreement with the Employer
which provides for the payment of severance or salary continuation
(whether such terms are used or not in such agreement) in the event
of the termination of the employment of the employee, (ii) any
independent contractor, (iii) any consultant, (iv) any
person performing services for the Employer under an independent
contractor or consultant agreement, purchase order, supplier
agreement or any other form of agreement which the Employer enters
into for services, (iv) any “leased
employee” as defined in Section 414(n) of the
Internal Revenue Code, (vi) any contract employee, temporary
employee, or any employee classified by the
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Employer other than as a regular full-time
employee or regular part-time employee, or (vii) any employee
covered by a collective bargaining agreement unless such
collective bargaining agreement provides for their coverage under
the Plan. For all purposes of the Plan, “regular part-time
employee” means an employee regularly scheduled to work
less than thirty (30) hours per week.
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3.
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CONDITIONS OF INELIGIBILITY
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An otherwise eligible employee shall
not be eligible for severance pay under the Plan if:
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(a)
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an eligible
employee ceases to be an eligible employee as defined in the
Plan;
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(b)
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the eligible
employee’s employment with the Employer terminates by reason
of death, conduct leading to immediate termination or
discharge for good reason, as determined in the sole discretion of
the Company’s Vice President & Chief Human Resources
Officer;
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(c)
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the eligible
employee’s employment with the Employer terminates due to
retirement, resignation, job abandonment, or failure to complete
three (3) months of employment;
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(d)
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employment with
the Employer is involuntarily terminated after the eligible
employee refuses a position at the same Employer location at which
the eligible employee is then employed or some other location of
the Company or any other Employer provided that such position
(i) is located within fifty (50) miles from the Employer
location at which the eligible employee is then employed and
(ii) pays similar base pay (i.e., the current base pay level
or a greater base pay level or within ten percent (10%) of the
current base pay level if the eligible employee is changed to a
lesser base pay level);
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(e)
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the eligible
employee is employed in an Employer operation, facility, business
segment or part thereof which is sold, leased or otherwise
transferred. In each such situation, a severance arrangement, if
any, may be provided in the sole discretion of the Vice
President & Chief Human Resources Officer of the
Company;
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(f)
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the eligible
employee is entitled to a benefit from a disability benefit plan
sponsored by the Company;
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(g)
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the eligible
employee remains on an authorized leave of absence, provided
however, that an eligible employee who returns from an authorized
leave of absence of three (3) months or less and who cannot be
placed in employment with the Employer shall be eligible for
severance pay under the Plan;
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(h)
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the eligible
employee leaves employment with the Employer prior to the date
authorized by the Employer;
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(i)
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the eligible
employee’s employment with the Employer is terminated under
the terms of any form of group reorganization/restructuring benefit
plan or program sponsored by the Employer; or
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(j)
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the Plan is
terminated.
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The foregoing list of conditions is
intended to be illustrative and may not be all inclusive; the Plan
Administrator will determine in the Plan Administrator’s sole
discretion whether an eligible employee is eligible for severance
pay under the Plan.
In exchange for providing the
Company with a valid Waiver and General Release Agreement, an
employee who is eligible for severance pay under the Plan will
receive severance pay in accordance with the following table;
provided that in no event shall the amount of severance pay payable
to any employee exceed 52 weeks of pay:
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Eligible Employee’s Complete Years of
Service
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Weeks of Severance
Pay
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At least three
(3) months, but less than three (3) years
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Two (2) weeks
of pay
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At least three
(3) years, but less than five (5) years
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One (1) week of
pay for each year of service
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At least five
(5) years, but less than ten (10) years
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One and one-half (1
1
/ 2 ) weeks
of pay for each year of service
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Ten
(10) or more years
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Two (2) weeks
of pay for each year of service
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An eligible employee’s
“years of service” for all purposes of the Plan
shall be determined from the eligible employee’s last date of
hire, including the date of hire of the employee by a previous
employer that was acquired by the Company, in either case as
determined in accordance with the Employer’s personnel
records, and equal to the number of whole years of service between
such date and the date of the employee’s termination of
employment.
For all purposes of the Plan,
(i) a “week of pay” for a regular full-time
or regular part-time salaried eligible employee shall be determined
by using his/her regular base salary compensation rate on his/her
date of termination of employment with the Employer, and
(ii) a “week of pay” for a regular
full-time or regular part-time hourly paid eligible employee shall
be determined by using his/her hourly pay rate on his/her date of
termination of employment with the Employer multiplied times
his/her regularly scheduled number of work hours per week in
accordance with the records of the Human Resources
Department.
The Vice President & Chief
Human Resources Officer of the Company may, in his/her sole
discretion, in writing, enhance the amount of severance pay which
an eligible employee is eligible to receive over the amount of
severance pay described above and/or make available one or more
forms of supplemental severance benefit.
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The consideration for the voluntary Waiver and
General Release Agreement shall be the severance pay (and, if
applicable, any enhancement thereto and/or any supplemental
severance benefit) which the eligible employee would otherwise not
be eligible to receive.
