(HRH INSURANCE HILB, ROGAL AND HAMILTON COMPANY
LOGO) 4235 Innslake Drive
P.O. Box 1220
Glen Allen, Virginia 23060-1220
(804) 747-6500
FAX (804) 747-6046
March 29, 1996
Dear Shareholder:
You are cordially invited to attend our Annual
Meeting of Shareholders on Tuesday, May 7, 1996, at
10:00 a.m. at Crestar Bank, 919 East Main Street,
Richmond, Virginia. At the meeting, you will be asked
to elect three directors for the class of directors
whose term of office expires in 1996, to consider and
act upon a proposal to amend the Articles of
Incorporation for authorization of preferred stock, and
to approve the selection of independent auditors for
the Company for 1996. On the following pages, you will
find the formal notice of annual meeting and the proxy
statement.
Whether or not you plan to attend the meeting, it
is important that your shares be represented and voted
at the meeting. Therefore, you are urged to complete,
sign, date and mail your proxy promptly in the enclosed
postage-paid envelope.
We hope you will participate in the annual
meeting, either in person or by proxy.
Sincerely,
/s/ Robert H. Hilb
Robert H. Hilb
Chairman and Chief Executive Officer
<PAGE>
(HRH INSURANCE LOGO)
HILB, ROGAL
AND HAMILTON
COMPANY
4235 Innslake Drive
P.O. Box 1220
Glen Allen, Virginia 23060-1220
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of Hilb, Rogal and Hamilton
Company (the Company) will be held on Tuesday, May 7, 1996, at 10:00
a.m. at Crestar Bank, 919 East Main Street, Richmond, Virginia, for the
following purposes:
1. To elect three directors of the class of directors whose term
of office expires in 1996, to serve for a term of three years;
2. To consider and act upon a proposal to amend the Articles
of Incorporation for authorization of 5,000,000 shares of
preferred stock;
3. To consider and act upon a proposal to appoint the firm of
Ernst & Young LLP as independent auditors for the
Company for the fiscal year ending December 31, 1996; and
4. To transact such other business as may properly come before
the meeting.
Only shareholders of record at the close of business on March 5,
1996, the record date fixed by the Board of Directors of the Company, are
entitled to notice of, and to vote at, the meeting.
By Order of The Board of Directors
Dianne F. Fox
Senior Vice President and Corporate Secretary
March 29, 1996
IMPORTANT
Whether or not you plan to attend the meeting, please vote, sign, date
and return the enclosed proxy as promptly as possible. If you attend the
meeting, you may vote your shares in person, even though you have
previously signed and returned your proxy.
<PAGE>
PROXY STATEMENT
Proxies in the form enclosed are solicited by the Board of Directors
for the Annual Meeting of Shareholders to be held on May 7, 1996, and
any duly reconvened meeting after adjournment thereof (the Meeting).
Any shareholder who executes a proxy has the power to revoke it at any
time by written notice to the Secretary of the Company, by executing a
proxy dated as of a later date or by voting in person at the Meeting.
It is expected that this proxy statement and the enclosed proxy card will
be mailed on or about March 29, 1996, to all shareholders entitled to
vote at the Meeting.
The cost of soliciting proxies for the Meeting will be borne by the
Company. The Company does not intend to solicit proxies other than by
use of the mails, but certain officers and employees of the Company or its
subsidiaries, without additional compensation, may use their personal
efforts, by telephone or otherwise, to obtain proxies. The Company may
also reimburse banks, brokerage firms and other custodians, nominees and
fiduciaries for their reasonable out-of-pocket expenses in forwarding
proxy materials to the beneficial owners of the shares.
On the record date of March 5, 1996, the date for determining
shareholders entitled to notice of, and to vote at, the Meeting, there
were outstanding 13,742,367 shares of Common Stock. Each share of Common
Stock is entitled to one vote on all matters to be acted upon at the
Meeting. A majority of the shares entitled to vote, represented in person
or by proxy, will constitute a quorum for the transaction of business at
the Meeting.
The management and directors are not aware of any matters to be
presented for action at the Meeting other than the matters stated in the
notice of the Meeting. If any such matter requiring a vote of the
shareholders should properly come before the Meeting, unless otherwise
instructed, it is the intention of the persons named in the proxy card to
vote such proxy in accordance with their best judgment.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 1, 1996, certain
information with respect to the beneficial ownership of the Company's
Common Stock by each director and nominee; the Chief Executive Officer,
Robert H. Hilb, and each of the Company's four other most highly paid
executive officers who own shares of the Company's Common Stock,
Andrew L. Rogal, John C. Adams, Jr., Ronald J. Schexnaydre and Timothy
J. Korman (collectively, the Named Executive Officers); and all directors
and officers as a group. Except as otherwise indicated, each individual
named has sole investment and voting power with respect to the shares
shown.
Number of
Common Shares
Name of & Nature of Percent
Beneficial Owner/Number Beneficial of
of Persons in Group Ownership Class
Robert H. Hilb 342,750 (1) 2.5
John C. Adams, Jr. 122,750 (1) (2) **
Andrew L. Rogal 89,140 (1) (3) **
J.S.M. French 52,500 (1) **
Timothy J. Korman 45,776 (1) **
Ronald J. Schexnaydre 42,063 (1) **
Robert S. Ukrop 30,648 (1) (4) **
Theodore L. Chandler, Jr. 27,550 (1) **
Thomas H. O'Brien 17,597 (1) **
Norwood H. Davis, Jr. 14,942 (1) **
Philip J. Faccenda 6,500 (1) **
All directors and officers 864,956 (5) 6.3
as a group (19 persons,
including those named)
** Percentage of ownership is less than 1% of the outstanding
shares of Common Stock of the Company.
(1) The number of shares indicated includes 51,250 shares for Mr.
Hilb; 35,750 shares for Mr. Adams; 34,500 shares for Mr. Rogal;
12,500 shares for Mr. French; 20,500 shares for Mr. Korman; 26,000
shares for Mr. Schexnaydre; 12,500 shares for Mr. Ukrop; 12,500
shares for Mr. Chandler; 12,500 shares for Mr. O'Brien; 4,000
shares for Mr. Davis; and 4,000 shares for Mr. Faccenda; each
respectively represented by options granted under the Company's
1989 Stock Plan, which are exercisable within sixty days after March
1, 1996.
(2) The number of shares indicated includes 6,000 shares owned by a
trust for John C. Adams' wife. Mr. Adams disclaims beneficial
ownership of such shares.
(3) The number of shares indicated includes 17,300 shares held in a
trust for which Andrew L. Rogal is a trustee. Although Mr. Rogal,
as trustee, has voting and investment power for these shares, he
disclaims beneficial ownership thereof.
(4) The number of shares indicated includes 1,250 shares owned by an
investment club in which Robert S. Ukrop is an officer, for which
voting and investment power is shared.
(5) The number of shares indicated includes 4,250 shares represented
by options granted under the Company's 1986 Incentive Stock
Option Plan and 258,500 shares represented by options granted
under the Company's 1989 Stock Plan, which are exercisable within
sixty days after March 1, 1996.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS
The following table sets forth, as of March 1, 1996, certain
information with respect to each person known by the Company to be the
beneficial owner of 5% or more of the outstanding shares of Common
Stock of the Company. In preparing the table below, the Company has
relied, without further investigation, on information contained on the
Schedule 13G filed by each reporting person with the Securities and
Exchange Commission (the Commission) under the Securities Exchange
Act of 1934, as amended (the Exchange Act).
Number of Common
Name & Address Shares and Nature Percent of
of Beneficial Owner of Beneficial Ownership Class
Quest Advisory Corporation (1) 896,075 (1) 6.3
Quest Management Company
Charles M. Royce
1414 Avenue of the Americas
New York, New York 10019
Lindner Growth Fund (2) 825,000 (2) 5.7
Ryback Management Corporation
7711 Carondelet Avenue
Box 16900
St. Louis, Missouri 63105
T. Rowe Price Associates, Inc. (3) 791,400 (3) 5.6
100 East Pratt Street
Baltimore, Maryland 21202
(1) Quest Advisory Corporation (Quest), Quest Management Company
(QMC) and Charles M. Royce (Royce) filed a joint Schedule 13G
pursuant to Rule 13d-(1)(b)(ii)(H) of the Exchange Act to report
with respect to beneficial ownership as of December 31, 1995 by
Quest and QMC, Investment Advisers registered under Section 203
of the Investment Advisers Act of 1940. Quest reported that it has
sole voting power as to 835,875 shares and sole dispositive power as
to 835,875 shares. QMC reported that it has sole voting power as
to 60,200 shares and sole dispositive power as to 60,200 shares.
Royce may be deemed to be a controlling person of Quest and
QMC, and as such may be deemed to beneficially own the shares;
however, Royce does not own any shares outside of Quest and
QMC, and disclaims beneficial ownership of the shares held by
Quest and QMC. The reporting group represented in the Schedule
13G that the shares of Common Stock reported thereon were
acquired in the ordinary course of business and were not acquired
for the purpose of and do not have the effect of changing or
influencing the control of the Company and were not acquired in
connection with or as a participant in any transaction having such
purpose or effect.
(2) Ryback Management Corporation (Ryback), an investment company
adviser, filed a Schedule 13G pursuant to the Exchange Act to
report with respect to beneficial ownership as of December 31, 1995
by the Lindner Growth Fund. Lindner Growth Fund is a separate
series of the Linder Investment Series Trust, an Investment
Company registered under Section 8 of the Investment Company
Act. Ryback reported that it has sole voting power as to 825,000
shares and sole dispositive power as to 825,000 shares. Ryback
represented in the Schedule 13G that the shares of Common Stock
reported thereon were acquired in the ordinary course of business
and were not acquired for the purpose of and do not have the effect
of changing or influencing the control of the Company and were not
acquired in connection with or as a participant in any transaction
having such purpose or effect.
(3) T. Rowe Price Associates, Inc. (Price Associates), an Investment
Adviser registered under Section 203 of the Investment Advisers Act
of 1940, filed a Schedule 13G pursuant to the Exchange Act to
report with respect to beneficial ownership as of December 31,
1995. Price Associates reported it has sole voting power as to
41,700 shares and sole dispositive power as to 791,400 shares. For
purposes of the reporting requirements of the Exchange Act, Price
Associates is deemed to be a beneficial owner of these shares;
however, Price Associates expressly disclaims beneficial ownership
of such shares. These shares are owned by various individual and
institutional investors which Price Associates serves as an investment
adviser with power to direct investments and/or sole power to vote
the shares. Price Associates represented in the Schedule 13G that
the shares of Common Stock reported thereon were acquired in the
ordinary course of business and were not acquired for the purpose
of and do not have the effect of changing or influencing the control
of the Company and were not acquired in connection with or as a
participant in any transaction having such purpose or effect.
PROPOSAL ONE
ELECTION OF DIRECTORS
Three directors are to be elected at the Meeting to serve for terms
of three (3) years expiring on the date of the Annual Meeting in 1999 and
until their successors are elected.
It is intended that the votes represented by the proxies, unless
otherwise specified, will be cast for the election as directors of the
nominees listed below, each of whom is now a director of the Company.
The election of each nominee for director requires the affirmative vote of
the holders of a plurality of the shares of Common Stock of the Company
cast in the election of directors. Votes that are withheld and shares
held in street name (broker shares) that are not voted in the election of
directors will not be included in determining the number of votes cast.
Each nominee has consented to being named in the proxy statement and
has agreed to serve if elected. If, at the time of the Meeting, any
nominee should be unable to serve as a director, votes will be cast,
pursuant to the enclosed proxy, for such substitute nominee as may be
nominated by the Board of Directors.
As of the date of this proxy statement, the Board of Directors has
no reason to believe that any of the nominees will be unable or unwilling
to serve.
The following information is furnished with respect to each nominee
and each director whose term of office will continue after the Meeting.
Nominees for Election for Terms Expiring in 1999
Theodore L. Chandler, Jr., 43, has been a principal in the law firm
of Williams, Mullen, Christian & Dobbins in Richmond, Virginia since
1982 and has been a director of the Company since 1986. Williams,
Mullen, Christian & Dobbins has represented the Company as legal
counsel since the Company's formation in 1982. He is a director of
Lawyers Title Corporation. Mr. Chandler is a member of the Audit
Committee, the Compensation Committee and the Executive Committee.
Norwood H. Davis, Jr., 56, has been Chairman of the Board and
Chief Executive Officer of Trigon Blue Cross Blue Shield, a company
engaged in the delivery of insurance and related employee benefits
products in Virginia, since 1989 and has been a director of the Company
since 1994. He is a director of Signet Banking Corporation. Mr. Davis is
Chairman of the Audit Committee.
Thomas H. O'Brien, 59, has been Chairman and Chief Executive
Officer of PNC Bank Corp., a multi-bank holding company engaged in
financial services activities in Pittsburgh, Pennsylvania, since 1985 and
has been a director of the Company since 1982. He has been Chairman of
PNC Bank, National Association, a national banking institution in
Pittsburgh, Pennsylvania, since 1993. He is a director of Bell Atlantic
Corporation and PNC Bank Corp. Mr. O'Brien is a member of the Audit
Committee, the Compensation Committee and the Nominating Committee.
The Board of Directors recommends that the shareholders vote for
the nominees set forth above.
Incumbent Directors Whose Terms Expire at 1997 Annual Meeting
Robert H. Hilb, 69, has been Chairman and Chief Executive Officer
of the Company since 1991 and has been a director of the Company since
1982. He was President of the Company from 1982 to 1995. He is a
director of Lawyers Title Corporation. Mr. Hilb is Chairman of the
Executive Committee and Chairman of the Nominating Committee.
Andrew L. Rogal, 47, has been President and Chief Operating
Officer of the Company since 1995 and has been a director of the
Company since 1989. He was Executive Vice President of the Company
from 1991 to 1995 and Senior Vice President of the Company from 1990
to 1991. He was Chief Executive Officer of Hilb, Rogal and Hamilton
Company of Pittsburgh, Inc., a subsidiary of the Company, from 1990 to
1995 and was President of this subsidiary from 1987 to 1993. Mr. Rogal
is a member of the Executive Committee.
Philip J. Faccenda, 66, has been Vice President and General
Counsel, Emeritus of the University of Notre Dame, a higher education
facility in Notre Dame, Indiana, since 1995 and has been a director of the
Company since 1993. He was Vice President and General Counsel of the
University of Notre Dame from 1992 to 1994. Prior thereto, he was a
partner in the law firm of Barnes & Thornburg in South Bend, Indiana
from 1982 to 1992. He has been President of Bear Financial Corp., a
private holding company, in South Bend,Indiana since 1987. Mr. Faccenda
is a trustee of the University of Notre Dame, University of Portland and
St. Mary's College. He is a director of First Source Corporation. Mr.
Faccenda is Chairman of the Compensation Committee.
Incumbent Directors Whose Terms Expire at 1998 Annual Meeting
J.S.M. French, 55, has been President of Dunn Investment
Company, a construction and investment company in Birmingham,
Alabama, since 1978 and has been a director of the Company since 1984.
He is a director of First Alabama Bancshares, Inc. and Energen
Corporation. Mr. French is a member of the Audit Committee, the
Compensation Committee and the Nominating Committee.
Robert S. Ukrop, 49, has been President and Chief Operating
Officer of Ukrop's Super Markets, Inc., a chain of retail food stores in
Richmond, Virginia, since 1994 and has been a director of the Company
since 1989. He was Executive Vice President of Ukrop's Super Markets,
Inc. from 1987 to 1994. He is a first cousin of Timothy J. Korman,
Executive Vice President, Chief Financial Officer and Treasurer of the
Company. Mr. Ukrop is a member of the Executive Committee and the
Nominating Committee.
Meetings and Committees of the Board of Directors
The standing committees of the Board of Directors are the
Executive Committee, the Audit Committee, the Compensation Committee
and the Nominating Committee. The Executive Committee, which is
subject to the supervision and control of the Board of Directors, has been
delegated substantially all of the powers of the Board of Directors in
order for the Executive Committee to act between meetings of the Board.
The responsibilities of the Audit Committee include the review of the
scope and the results of the work of the independent auditors and internal
auditors, the review of internal accounting controls and the
recommendation of the independent auditors to be designated for the
ensuing year. As more fully discussed below under "Compensation
Committee Report on Executive Compensation," the Compensation Committee
establishes the compensation of all executive officers of the Company with
the title of Senior Vice President and above and administers the Company's
stock option plans, the Outside Directors Deferral Plan and the
Supplemental Executive Retirement Plan. The Nominating Committee is
responsible for recommending to the Board of Directors persons to be
nominated for election as directors of the Company. See "Proposals for
1997 Annual Meeting."
In 1995, there were four meetings of the Board of Directors, two
meetings of the Executive Committee, two meetings of the Audit
Committee and three meetings of the Compensation Committee. The
Nominating Committee did not meet during 1995. Each member of the
Board of Directors attended at least 75% of the aggregate total number of
meetings of the Board and the committees on which he served.
Directors' Compensation
Each director who is not an officer of the Company receives an
annual retainer of $10,000, a fee of $2,500 for each Board meeting
attended and a fee of $500 for each committee meeting attended if such
meeting occurs on a day other than a scheduled meeting of the Board of
Directors. Directors who are also officers of the Company receive no
compensation for their services as directors.
The Company has an Outside Directors Deferral Plan which permits
a non-employee director to defer all or a portion of his compensation.
Interest will be paid on the amounts deferred at a rate determined by the
Compensation Committee. Subject to certain restrictions, the director may
elect at the time of deferral to take cash distributions, in whole or in
part, from his account either prior to or following termination of
service.
The Company has a 1989 Stock Plan which provides that each non-
employee director will receive a grant of an option to purchase 2,000
shares of Common Stock on the first business day following the Annual
Meeting of Shareholders in each of the years 1993 through 1997.
Therefore, pursuant to said plan, on May 3, 1995, Theodore L. Chandler,
Jr., Norwood H. Davis, Jr., Philip J. Faccenda, J.S.M. French, Thomas H.
O'Brien and Robert S. Ukrop were each granted an option to purchase 2,000
shares of the Common Stock of the Company. The exercise price of all
options granted to each non-employee director is the fair market value of
the Common Stock on the date of grant. All of the options become
exercisable six months after the date of grant and expire ten years
from the date of grant.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Under rules established by the Commission, the Company is
required to provide certain information with respect to the compensation
and benefits provided to the Company's Chief Executive Officer, Robert
H. Hilb, and the other Named Executive Officers. The following report of
the Compensation Committee of the Board of Directors addresses the
Company's compensation policies in effect during 1995.
Role of Compensation Committee
Decisions on compensation of certain executive officers of the
Company are made by the Compensation Committee of the Board. Each
member of the Compensation Committee is a non-employee director and
qualifies as a disinterested person for purposes of Rule 16b-3 adopted by
the Commission under the Exchange Act. The Compensation Committee
has authority from the Board to review and determine the salaries of all
of the Company's executive officers with the title of Senior Vice
President and above.
In addition to determining salaries, the Compensation Committee
reviews and approves management incentive programs and other benefits
for executive officers. The Compensation Committee also administers the
Company's stock option plans. Finally, the Committee recommends to the
Board of Directors such other forms of remuneration as the Committee
deems appropriate. All decisions by the Compensation Committee relating
to the compensation of the Company's executive officers are reported to
the full Board.
The following is the text of the report adopted by the Compensation
Committee with respect to executive compensation for 1995.
Executive Compensation Policies
The Compensation Committee's executive compensation policies are
designed to provide competitive levels of compensation that integrate pay
with the Company's annual and long-term performance goals, recognize
individual initiative and achievement and assist the Company in attracting
and retaining highly qualified executives. They provide for competitive
base salaries which reflect individual performance and level of
responsibility, annual bonuses payable in cash on the basis of Company
financial success, individual merit and achievement in obtaining annual
performance goals and long-term stock-based incentive opportunities which
strengthen the mutuality of interests between senior management and the
Company's shareholders.
In furtherance of its responsibility to determine executive
compensation, the Compensation Committee annually, or more frequently,
reviews the Company's executive compensation program. The
Compensation Committee evaluates the salaries and compensation
structures of executive officers of peer companies in the industry in
order to establish general parameters within which it may fix competitive
compensation for its executive officers. The peer group used for
compensation analysis for 1995 is the same as the peer group reflected in
the performance graph included in this proxy statement.
The Compensation Committee then determines the appropriate
salary and management incentive opportunity for each executive officer
using a number of factors, including the executive officer's individual
duties and responsibilities in the Company, tenure, his or her relative
importance to the overall success of the Company's short and long-term
goals and attainment of individual performance goals, if appropriate. The
Compensation Committee adopted a policy in 1995 of transitioning the
executive officer's incentive bonus to a level where it may constitute
fifty percent (50%) of his or her base compensation in those years in
which the Company and the executive officer's performance so warrant.
This is a more specific reiteration of the core compensation philosophy
of the Compensation Committee that incentive compensation should be a very
substantial component of total compensation.
Combining subjective and objective policies and practices, this
assessment process is undertaken annually, or more frequently, by the
Compensation Committee in order to implement the Company's pay-for-
performance policy, which focuses on an executive officer's total
compensation, including cash and non-cash compensation, from all sources.
Based upon the Committee's review of executive compensation in the
Company's industry, the Committee believes that the Company's
compensation of its executive officers is comparable to its peer companies
and provides proper incentives to the executive officer group.
1995 Base Salaries and Annual Incentives
In 1995, the Compensation Committee approved moderate increases
in the base salaries of Messrs. Hilb, Rogal, Schexnaydre and Korman. This
follows on a two year period when base compensation was flat except for
increases for additional responsibilities. In determining the amounts of
salary and bonus paid to Mr. Hilb in 1995, the Compensation Committee
primarily took into account the Company's revenues and earnings, Mr.
Hilb's leadership during a period of difficult conditions in the
insurance market and the performance of the Company compared to others in
its industry group. Mr. Hilb's base salary was increased by $20,000 to
$380,000 for 1995.
The Company's executive officers are also eligible for an annual
management incentive award in the form of a cash bonus. The Named
Executive Officers participate in a three year incentive bonus plan, which
was implemented in 1994, wherein a bonus pool is established based on
improved earnings per share and increased amounts of pre-tax profits over
the preceding year. The purpose of the program is to more closely align
the interests of the senior executives with the shareholders and further
strengthen the Company's pay-for-performance policy. The Committee
awards bonuses from the bonus pool to the Named Executive Officers
based on the executive's individual performance and retains discretion not
to pay out the entire pool, if circumstances so warrant. In February
1996, utilizing the aforementioned factors and in recognition of his
leadership in the improvement in profitability over the previous year,
the Committee awarded Mr. Hilb an incentive bonus of $140,000 out of the
pool for his 1995 performance.
December 1993 Stock Option Award Vesting
In December 1993, the Compensation Committee developed a three
year performance-based program for granting stock options to the executive
officers of the Company. This program was begun to more clearly align
the interests of the program participants with the Company's shareholders
and, for three years, will take the place of other option grants to the
participants. The December 1993 Options are subject to performance-based
vesting criteria with the earliest vesting in January 1995. With respect
to the allocation of available options among the Named Executive Officers
and other executive officers, the Committee was of the view that as a
person's ability to impact earnings per share and other direct elements of
stock value increases, greater portions of total compensation should be
linked to the long-term performance of the Company's Common Stock.
Based upon this criteria, the Committee granted Mr. Hilb a December
1993 Option to acquire 30,000 shares of Common Stock.
The exercise price of the December 1993 Options was based on the
closing sales price of the Common Stock as reported on the New York Stock
Exchange on the date of grant which was $13.25. The right to exercise
the December 1993 Options vests at a rate of 33 1/3% of the aggregate
number of shares covered by such options on each January 31, 1995,
January 31, 1996 and January 31, 1997. However, the right to exercise
such options is contingent upon (i) the continued employment of optionee
from the date of grant, except in the event of his death, permanent
disability or retirement and (ii) an increase of at least 10% in the
annual earnings per share of the Common Stock of the Company over the
immediately prior year. The shares will not be available for vesting if
either of these criteria is not met for each vesting period. The
December 1993 Options expire ten years from date of grant. Based on the
above criteria, 33 1/3 % of the December 1993 Options vested on January
31, 1995 and 33 1/3% did not vest on January 31, 1996.
Tax Considerations
The Omnibus Budget Reconciliation Act of 1993 established certain
criteria for the tax deductibility of compensation in excess of $1.0
million paid to the Company's executive officers. The Company is not in
danger of losing deductions under the new law. The Committee will
carefully consider any plan or compensation arrangement that would result
in the disallowance of compensation deductions. The Committee will use
its best judgment in such cases, taking all factors into account,
including the materiality of any deductions that may be lost. To date,
the Committee has not adopted a policy that dictates its decision in such
a situation.
The tables which follow this report, and accompanying narrative and
footnotes, reflect the decisions covered by the above discussion.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE COMPANY'S
BOARD OF DIRECTORS:
Philip J. Faccenda
J.S.M. French
Thomas H. O'Brien
Theodore L. Chandler, Jr.
Compensation Committee Interlocks
and Insider Participation
Theodore L. Chandler, Jr., a member of the Company's
Compensation Committee, is a principal in the law firm of Williams,
Mullen, Christian & Dobbins, Richmond, Virginia, which serves as outside
counsel to the Company.
SUMMARY COMPENSATION TABLE
The following table sets forth the annual and long-term
compensation paid by the Company to each of the Named Executive
Officers for the fiscal years ended December 31, 1995, 1994 and 1993.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
Awards
Securities
Other Annual Underlying All Other
Name and Principal Compensation Options Compensation
Position Year Salary($) Bonus($) ($)(4) (#) ($)
<S> <C> <C> <C> <C> <C> <C>
Robert H. Hilb 1995 380,000 140,000 (1) -- -- 190,229 (7)(8)
Chairman and 1994 360,000 175,000 (2) -- -- 15,505 (7)(8)
Chief Executive Officer 1993 360,000 120,000 (3) -- 30,000 (5) 9,324 (7)
15,000 (6)
Andrew L. Rogal 1995 281,593 60,000 (1) -- -- 74,943 (7)(8)
President and 1994 250,000 75,000 (2) -- -- 9,306 (7)(8)
Chief Operating Officer 1993 250,000 56,000 (3) -- 30,000 (5) 7,075 (7)
10,000 (6)
John C. Adams, Jr. 1995 240,000 48,000 (1) -- -- 87,699 (7)(8)
Executive Vice 1994 240,000 60,000 (2) -- -- 11,188 (7)(8)
President 1993 240,000 56,000 (3) -- 30,000 (5) 9,324 (7)
10,000 (6)
Ronald J. Schexnaydre 1995 195,000 48,000 (1) -- -- 48,857 (7)(8)
Senior Vice President 1994 172,500 60,000 (2) -- -- 9,926 (7)(8)
1993 153,333 30,000 (3) -- 30,000 (5) 6,133 (7)
10,000 (6)
Timothy J. Korman 1995 120,000 40,500 (1) -- -- 30,490 (7)(8)
Executive Vice 1994 102,000 45,000 (2) -- -- 6,226 (7)(8)
President, Chief 1993 92,667 36,000 (3) -- 15,000 (5) 3,707 (7)
Financial Officer and 5,000 (6)
Treasurer
</TABLE>
(1) Bonuses included herein were paid in 1996 for services rendered in
1995.
(2) Bonuses included herein were paid in 1995 for services rendered in
1994.
(3) Bonuses included herein were paid in 1993 and 1994 for services
rendered in 1992 and 1993.
(4) The dollar value of perquisites and other personal benefits received
by each of the Named Executive Officers did not exceed the lesser
of either $50,000 or 10 percent of the total amount of annual salary
and bonus reported for any named individual.
(5) The stock options detailed above were granted under the
Company's 1989 Stock Plan in December 1993. Refer to
"December 1993 Stock Option Award Vesting" in the Compensation
Committee Report on Executive Compensation for terms of such
options, one-third of which vested on January 31, 1995 and one-
third of which did not vest on January 31, 1996.
(6) The stock options detailed above, granted pursuant to the 1989
Stock Plan, contain a provision whereby the right to exercise such
options vests at a rate of 20% of the aggregate number of shares
covered by such options for each one full year of continued
employment from the grant date, with total exercisability occurring
upon five full years of continued employment by the Company, and
expire ten years from grant date.
(7) The amount shown for each Named Executive Officer for 1995
includes the Company's profit sharing and 401(k) matching
contributions as follows: Mr. Hilb, $6,000; Mr. Rogal, $4,500; Mr.
Adams, $6,000; Mr. Schexnaydre, $6,000; and Mr. Korman, $4,800.
The amount shown for each Named Executive Officer for 1994
includes the Company's profit sharing and 401(k) matching
contributions as follows: Mr. Hilb, $8,250; Mr. Rogal, $6,750; Mr.
Adams, $8,250; Mr. Schexnaydre, $8,250; and Mr. Korman, $5,610.
The amount shown for 1993 represents the Company's profit
sharing and 401(k) matching contributions to each Named Executive
Officer.
(8) The amount shown for each Named Executive Officer for 1995
includes the Company's expense to the Supplemental Executive
Retirement Plan as follows: Mr. Hilb, $184,229; Mr. Rogal,
$70,443; Mr. Adams, $81,699; Mr. Schexnaydre, $42,857; and Mr.
Korman, $25,690. The amount shown for each Named Executive
Officer for 1994 includes the Company's expense to the
Supplemental Executive Retirement Plan as follows: Mr. Hilb,
$7,255; Mr. Rogal, $2,556; Mr. Adams, $2,938; Mr. Schexnaydre,
$1,676; and Mr. Korman, $616.
OPTION GRANTS IN LAST FISCAL YEAR
No stock options were granted to the Named Executive Officers
during fiscal year 1995. No stock appreciation rights (SARs) were
granted in fiscal year 1995. There are no outstanding SARs.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
The following table provides information concerning the value of
the outstanding options for the Named Executive Officers on December
31, 1995. There were no stock options exercised by any named
individual during 1995. There are no outstanding SARs.
[CAPTION]
<TABLE>
Number of Securities
Underlying Value of Unexercised
Unexercised Options In-the-Money Options
at Fiscal Year End at Fiscal Year End
(#)(1) ($)(2)
Name Exercisable / Unexercisable Exercisable / Unexercisable
<S> <C> <C>
Robert H. Hilb 46,250 / 33,000 21,250 / 5,000
Andrew L. Rogal 30,500 / 30,000 18,250 / 5,000
John C. Adams, Jr. 31,750 / 30,000 18,250 / 5,000
Ronald J. Schexnaydre 23,000 / 28,000 15,125 / 3,750
Timothy J. Korman 18,500 / 15,000 14,500 / 2,500
</TABLE>
(1) The aggregate number of exercisable and unexercisable options
detailed above are based on the provisions of the Company's stock
option plans as of December 31, 1995. Since that date, additional
stock options for the Named Executive Officers are exercisable
within sixty days after March 1, 1996, and are reflected in the
Security Ownership Table and included in footnote (1) of that table.
(2) The value of in-the-money options was calculated by determining
the difference between the closing price of $13.375 per share of the
Company's Common Stock on the New York Stock Exchange on
December 29, 1995, the last trading day of the fiscal year, and the
exercise price of the options.
PROFIT SHARING SAVINGS PLAN
The Company has adopted a broad-based Profit Sharing Savings
Plan (the Profit Sharing Plan) in which the Named Executive Officers are
permitted to participate on the same terms as other employees who meet
applicable eligibility criteria. The Profit Sharing Plan includes a
salary reduction provision under Section 401(k) of the Internal Revenue
Code. Each year, the Board of Directors determines the Company's level
of contribution to the Profit Sharing Plan, including any matching
contributions in connection with the salary reduction provision under
Section 401(k). For 1995, the Profit Sharing Plan provided that the
minimum annual profit sharing contribution percentage was 3% of eligible
compensation, subject to certain earnings restrictions, and the matching
conribution was not less than 25% of the first 4% of a participant's
salary reduction. The Company profit sharing contribution was 3% of
participating employees' eligible compensation and the Company matching
contribution was $415,000 under the salary reduction provision of the
Profit Sharing Plan.
As of January 1, 1996, the Profit Sharing Plan was amended to
provide that the Company's profit sharing contribution percentage for 1996
and future years will be determined annually by the Board of Directors
based on the net earnings of the Company and the matching contribution
will be equal to 50% of the first 4% of a participant's salary reduction.
The Profit Sharing Plan was further amended to allow a participant to
elect to contribute on a pre-tax salary reduction basis from 1% to 15% of
his compensation to the plan, with the maximum annual contribution limited
to $9,500 in 1996.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Named Executive Officers participate in the Company's
Supplemental Executive Retirement Plan, which is an unfunded defined
benefit plan not qualified under the Internal Revenue Code. The
retirement benefits are computed without regard to the social security
offset but are offset by benefits attributable to Company contributions
payable from the Company's Profit Sharing Plan. Retirement benefits are
payable in the form of a single life annuity.
The formula for calculating retirement benefits is based upon the
product of a participant's applicable percentage, years of service for
purposes of benefit accrual, final average compensation and vesting
percentage. The applicable percentage is 3.3% for an employee who
becomes a vice president on or after reaching age 50 and 4.0% for an
employee who becomes a vice president before reaching age 50. Years of
service for purposes of benefit accrual means service with the Company at
the officer rank of vice president or higher but limited to a maximum of
fifteen years. Final average compensation is the participant's average
annual compensation for the sixty whole months prior to separation from
service. A participant is subject to a graduated vesting schedule over a
fifteen year period. Termination of employment prior to having attained
normal retirement age (age 65, except for a grandfathered participant
whose age is 70), or without having been credited with fifteen years of
service will result in a reduced benefit. Once determined, this benefit
is offset by the actuarial equivalent benefit produced by amounts
attributable to Company contributions to the Profit Sharing Plan.
On February 5, 1996, Mr. Hilb's benefit under the plan as a
grandfathered participant was fixed at $185,000 per annum. Based upon
current compensation and profit sharing account balances, with service
projected to normal retirement age, the estimated annual benefits payable
upon retirement at normal retirement age for each of the other Named
Executive Officers under the plan would be as follows: Mr. Rogal,
$280,675; Mr. Adams, $111,059; Mr. Schexnaydre, $73,527; and Mr.
Korman, $81,930.
EMPLOYMENT AGREEMENTS
Mr. Hilb entered into an employment agreement with the Company
on June 1, 1982, for an original term of 10 years. The agreement, as
amended, provides for an annual review of his salary by the Compensation
Committee of the Board of Directors of the Company, which may make
any adjustments it deems appropriate, provided that he will not be paid a
salary less than $310,000 per annum for the year beginning January 1,
1996, and any subsequent year. The agreement was further amended to
extend the initial term of employment to fourteen years and seven months.
Mr. Rogal entered into a three year employment agreement with the
Company on November 10, 1995 upon his election as President and Chief
Operating Officer. The effective date of the agreement is January 1,
1996, and may be renewed after the initial three year term for additional
one year terms. Under the agreement, Mr. Rogal will be paid an initial
annual base salary of $305,000, with subsequent modifications to be
determined by the Compensation Committee of the Board of Directors of the
Company. The agreement may be terminated at any time after the initial
term, with or without cause, upon ninety (90) days written notice by
either party, and may be terminated at any time by the Company for cause.
Messrs. Adams, Schexnaydre, and Korman are all employed under
standard employment agreements. All such agreements may be terminated
for cause and may be terminated without cause on notice of 90 days or
less. In no case would any of the foregoing individuals be entitled to
compensation greater than 90 days of base salary.
All of the employment agreements contain restrictive covenants
relating to the protection of confidential information and customers of
the Company.
CERTAIN TRANSACTIONS
Andrew L. Rogal, President and Chief Operating Officer of the
Company, received a loan from the Company in the aggregate amount of
$200,000 on September 25, 1995. The purpose of the loan was to provide
Mr. Rogal with bridge financing for the purchase of a personal residence
in Richmond, Virginia in connection with his relocation from Pittsburgh,
Pennsylvania. The loan is secured by shares of the Common Stock of the
Company owned by Mr. Rogal. The note is due on the earlier to occur of:
(i) September 25, 1997, or (ii) the sale of Mr. Rogal's former residence,
and bears interest at the rate of 5.73% per annum until paid.
PERFORMANCE GRAPH
The following Performance Graph sets forth the cumulative total
shareholder return, assuming reinvestment of dividends, on the Company's
Common Stock with the cumulative total return, assuming reinvestment of
dividends, of (1) the S&P 500 Index and (2) the Company's Peer Group
Index during the five year period ended December 31, 1995. The Peer
Group Index includes the Company, Arthur J. Gallagher & Co., Poe &
Brown, Inc., Marsh & McLennan Cos., Inc. and Alexander & Alexander
Services Inc. The Company selected this group in its good faith belief
that these other public companies are most similar to the Company's
insurance agency business.
[Graph as described above is presented here with the years 1990, 1991,
1992, 1993, 1994, and 1995 on the x axis and dollars between 0 and 250
shown on the y axis. The numerical data underlying the graph follows:]
Hilb, Rogal and
Hamilton Company S&P 500 Peer Group
12/31/90 $100.00 $100.00 $100.00
12/31/91 92.21 130.47 105.58
12/31/92 112.11 140.41 125.82
12/31/93 93.59 154.56 115.38
12/31/94 93.67 156.60 115.57
12/31/95 108.14 215.45 132.91
PROPOSAL TWO
AUTHORIZATION OF SHARES OF PREFERRED STOCK
The Board of Directors has unanimously approved, and recommends
to the shareholders that they adopt an amendment to Article 3 of the
Articles of Incorporation that would authorize five million shares of
preferred stock with such relative rights, preferences, limitations, and
class or series designations as shall be determined by the Board of
Directors.
The Company's Articles of Incorporation currently authorize the
issuance of 50,000,000 shares of Common Stock. No holder of Common
Stock has any preemptive rights.
Under the proposed amendment, in creating a new class or series
of preferred stock, the Board of Directors would set the rights of such
class or series as to dividends, voting, preferences, liquidations and
redemption. This would enable the Board of Directors to act promptly in
issuing a new class or series of preferred stock and to tailor the terms
of such class or series to the transaction or circumstances to which such
issuance relates. The Company will from time to time consider issuing
shares of preferred stock or rights to acquire preferred stock.
The full text of Proposal Two is attached to this Proxy Statement as
Exhibit A, which shareholders are urged to read carefully.
Purposes and Effects of Proposal Two
The Board of Directors believes that the authorization of shares of
preferred stock as contemplated by Proposal Two would benefit the
Company and its shareholders by giving the Company needed flexibility in
its corporate planning and in responding to developments in the Company's
business, including possible financing and acquisition transactions, stock
dividends and other general corporate purposes. Having such authorized
shares available for issuance in the future would give the Company greater
flexibility and allow shares of preferred stock to be issued without the
expense and delay of a special shareholders' meeting.
Except as otherwise required by applicable law or regulation, the
shares of preferred stock to be authorized in Proposal Two will be
issuable without further authorization by vote or consent of the
shareholders and on such terms and for such consideration as may be
determined by the Board of Directors.
The issuance of shares of preferred stock could adversely affect the
rights of the Company's common stockholders, since the dividend and
liquidation rights of the common stockholders will generally be
subordinate to the rights of preferred stockholders.
The Board of Directors could use preferred stock to discourage an
attempt to change control of the Company, even though a change in
control might be perceived as desirable by some shareholders, by, among
other things, selling a substantial number of shares of preferred stock to
persons who have an arrangement with the Company concerning the voting
of such shares, or by distributing shares of preferred stock, or rights to
receive such shares, to the shareholders. In this respect, certain
corporations have issued as a dividend to their common stockholders shares
of preferred stock or rights to acquire shares of preferred stock having
terms designed to encourage negotiated rather than unilateral takeover
proposals and to protect against the adverse consequences of certain
abusive takeover tactics such as open market accumulation programs and
partial and front-end loaded takeovers and freezeouts. The shares of
authorized preferred stock would be available for such purposes, and the
Board of Directors may from time to time consider issuing shares of
preferred stock for such purposes. The ability to issue shares of
preferred stock also would allow the Board of Directors to issue shares
only to shareholders supportive of management's position. This could
provide management with the means to block a business combination
considered desirable by some shareholders. In addition, the Board could
authorize the issuance of a series of preferred stock that votes as a
class, either separately or with the holders of Common Stock, on any
merger, sale or exchange of assets by the Company or any other
extraordinary corporate transaction.
The proposed amendment to the Articles of Incorporation is
permitted under Virginia law and is consistent with the rules of the New
York Stock Exchange, upon which the Company's Common Stock is listed
and traded.
Vote Required
Under Virginia law, more than two-thirds of the outstanding shares
of the Company's Common Stock must approve Proposal Two.
Abstentions and broker shares that are not voted on the matter will have
the same effect as a negative vote.
The Board of Directors believes that the proposed amendment of
the Company's Articles of Incorporation is in the best interests of
both the Company and its shareholders and recommends that the shareholders
vote in favor of Proposal Two.
PROPOSAL THREE
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has recommended, subject to shareholder
approval, the appointment of Ernst & Young LLP as independent auditors
to audit the consolidated financial statements of the Company for the
fiscal year ending December 31, 1996.
Representatives of Ernst & Young LLP are expected to be present
at the Meeting and will have an opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
The Board of Directors recommends that the shareholders approve
the appointment of Ernst & Young LLP as independent auditors for the
year 1996.
PROPOSALS FOR 1997 ANNUAL MEETING
Under the regulations of the Commission, any shareholder desiring
to make a proposal to be acted upon at the 1997 Annual Meeting of
Shareholders must cause such proposal to be delivered, in proper form, to
the Corporate Secretary of the Company, whose address is 4235 Innslake
Drive, P.O. Box 1220, Glen Allen, Virginia 23060-1220, no later than
November 29, 1996, in order for the proposal to be considered for
inclusion in the Company's Proxy Statement and form of proxy for that
meeting. The Company anticipates holding the 1997 Annual Meeting of
Shareholders on May 6, 1997.
The Company's Bylaws also prescribe the procedure a shareholder
must follow to nominate directors or to bring other business before
shareholders' meetings. For a shareholder to nominate a candidate for
director at the 1997 Annual Meeting of Shareholders, notice of nomination
must be received by the Corporate Secretary of the Company not less than
60 days and not more than 90 days prior to the meeting. The notice must
describe various matters regarding the nominee and the shareholder giving
notice. For a shareholder to bring other business before the 1997 Annual
Meeting of Shareholders, notice must be received by the Corporate
Secretary of the Company not less than 60 days and not more than 90 days
prior to the meeting. The notice must include a description of the
proposed business, the reasons therefor, and other specified matters. Any
shareholder may obtain a copy of the Company's Bylaws, without charge,
upon written request to the Corporate Secretary of the Company.
ANNUAL REPORTS
The Company's Annual Report to Shareholders for the fiscal year
ended December 31, 1995, including consolidated financial statements, is
being mailed to shareholders with this proxy statement. A copy of the
Company's Annual Report on Form 10-K, excluding exhibits, for 1995 filed
with the Commission can be obtained without charge by writing to Dianne
F. Fox, Senior Vice President and Corporate Secretary, 4235 Innslake
Drive, P.O. Box 1220, Glen Allen, Virginia 23060-1220.
EXHIBIT A
PROPOSAL TWO
AMENDMENT OF ARTICLES OF INCORPORATION TO
AUTHORIZE SHARES OF PREFERRED STOCK
Article 3 of the Articles of Incorporation is amended by deleting the
present Article 3 in its entirety and inserting therefor the following:
3. The total number of shares of all classes of capital stock
which the Corporation shall have authority to issue is 55,000,000, of
which 50,000,000 shares shall be Common Stock, no par value (the "Common
Stock"), and 5,000,000 shares shall be Preferred Stock, no par value (the
"Preferred Stock").
A. Common Stock. Except as otherwise provided in the
Virginia Stock Corporation Act as amended from time to time or in these
Articles of Incorporation as they may be hereafter amended (the
"Articles"), each share of Common Stock shall be entitled to one vote on
all matters submitted to a vote at any meeting of shareholders, and the
exclusive general voting power of shareholders for all purposes shall be
vested therein.
B. Preferred Stock.
1. The Preferred Stock may be issued from time
to time in one or more classes or series, with such designations, rights
and preferences as shall be stated and expressed herein or in the
resolution or resolutions authorizing the issue of shares of a particular
class or series. The Board of Directors, by adoption of an amendment to
these Articles, is expressly authorized to fix:
(a) The annual or other periodic dividend
rate for such class or series, the dividend payment dates, the date from
which dividends on all shares of such class or series issued shall be
cumulative, and the extent of participation rights, if any;
(b) The redemption price or prices, if any,
for such class or series and other terms and conditions on which such
class or series may or shall be retired and redeemed;
(c) The designation and maximum number of shares of
such class or series issuable;
(d) The right to vote, if any, with holders of
shares of any other class or series and the right to vote, if any, as a
separate voting group, either generally or as a condition to specified
corporate action;
(e) The amounts payable upon shares in the
event of voluntary or involuntary liquidation;
(f) The rights, if any, of the holders of
shares of such class or series to convert such shares into other classes
or series and the terms and conditions of any such conversion; and
(g) Such other rights and/or preferences as
may be specified by the Board of Directors and not prohibited by law.
C. No Preemptive Rights. No holder of shares of the
Corporation of any class, now or hereafter authorized, shall as such
holder have any preemptive right to subscribe to, purchase, or receive
any shares of the Corporation of any class, now or hereafter authorized,
or any rights or options to subscribe to or purchase any such shares or
other securities convertible into or exchangeable for or carrying rights
or options to purchase shares of any class or other securities, which may
at any time be issued, sold, or offered for sale by the Corporation or
subjected to rights or options to purchase granted by the Corporation.
*******************************APPENDIX*********************************
This proxy when properly executed will be voted in the manner directed by
the undersigned shareholder. If no direction is made, this proxy will be voted
FOR 1, 2 and 3.
1. ELECTION OF DIRECTORS FOR INSTRUCTIONS: To withhold
THREE YEAR TERMS EXPIRING AT authority to vote for any
THE 1999 ANNUAL MEETING: individual nominee, write each
such nominee's name in the
following space:
_________________________
FOR Nominees WITHHOLD
Theodore L. Chandler, Jr., AUTHORITY
Norwood H. Davis, Jr. and to vote for
Thomas H. O'Brien all such nominees
(except as marked to the
contrary at right).
2. PROPOSAL TO AMEND ARTICLES OF
INCORPORATION FOR AUTHORIZATION
OF 5,000,000 SHARES OF PREFERRED
STOCK:
FOR AGAINST ABSTAIN
3. PROPOSAL TO APPROVE THE APPOINTMENT
OF ERNST & YOUNG LLP AS THE INDEPENDENT
AUDITORS FOR THE COMPANY:
FOR AGAINST ABSTAIN
4. In their discretion, the Proxies are authorized to
vote upon such other business as may properly
come before the meeting.
Please sign exactly as name appears
below. When shares are held by joint
tenants, both should sign. When signing
in a representative capacity, give full
title as such. If a corporation, please
sign in corporation's name by
President or other authorized officer.
If a partnership, please sign in
partnership's name by authorized
person.
DATED____________________, 1996
_______________________________
Signature
_______________________________
Signature if held jointly
*PLEASE MARK INSIDE BLUE PLEASE MARK, SIGN, DATE AND
BOXES SO THAT DATA RETURN THE PROXY PROMPTLY
PROCESSING EQUIPMENT USING THE ENCLOSED ENVELOPE.
WILL RECORD YOUR VOTES*
- -------------------------------------------------------------------------------
Fold and Detach Here
ANNUAL MEETING
of
HILB, ROGAL AND HAMILTON COMPANY
Tuesday, May 7, 1996
10:00 a.m.
Crestar Bank
919 East Main Street
Richmond, Virginia
Agenda
o Election of Directors
o Proposal to Amend Articles of Incorporation to Authorize 5,000,000
Shares of Preferred Stock
o Proposal to Approve the Appointment of Independent Auditors
o Report on the Progress of the Company
PROXY HILB, ROGAL AND HAMILTON COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert H. Hilb, Timothy J. Korman and Walter
L. Smith and each or any of them, proxy for the undersigned, with power of
substitution to vote all the shares of Common Stock of Hilb, Rogal and
Hamilton Company held of record by the undersigned on March 5, 1996, at the
Annual Meeting of Shareholders to be held at 10:00 a.m., May 7, 1996, and at
any adjournments thereof, upon the matters designated on the other side and
as more fully set forth in the Proxy Statement and for the transaction of
such business as may properly come before the meeting.
(Continued on reverse side)
__________________________________________________________________________
FOLD AND DETACH HERE
