SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
HILB, ROGAL AND HAMILTON COMPANY
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
[HRH LOGO] HILB, ROGAL AND HAMILTON COMPANY
4235 Innslake Drive
P.O. Box 1220
A NEW YORK STOCK EXCHANGE COMPANY ("HRH") Glen Allen, Virginia 23060-1220
(804) 747-6500
FAX (804) 747-6046
- - --------------------------------------------------------------------------------
April 15, 1999
Dear Shareholder:
You are cordially invited to attend our Annual Meeting of
Shareholders on Tuesday, June 8, 1999, at 10:00 a.m. at The Jefferson
Hotel, 101 W. Franklin Street, Richmond, Virginia. At the meeting, you
will be asked to elect three directors to the class of directors whose
term of office expires in 2002. 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/ Andrew L. Rogal
-----------------------------------
Andrew L. Rogal
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
HILB, ROGAL AND HAMILTON COMPANY
4235 INNSLAKE DRIVE
P.O. BOX 1220
GLEN ALLEN, VIRGINIA 23060-1220
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 8, 1998
The Annual Meeting of Shareholders of Hilb, Rogal and Hamilton Company
(the Company) will be held on Tuesday, June 8, 1999, at 10:00 a.m. at The
Jefferson Hotel, 101 W. Franklin Street, Richmond, Virginia, for the following
purposes:
1. To elect three directors to the class of directors whose term of
office expires in 2002, to serve for a term of three years; and
2. To transact such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on April 2, 1999, 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
/s/ Walter L. Smith
---------------------
Walter L. Smith
VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE SECRETARY
April 15, 1999
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 June 8, 1999, 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 April 15, 1999, to all
shareholders entitled to vote at the Meeting.
The Company will pay all of the costs associated with this proxy
solicitation. To the extent necessary, 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 April 2, 1999, the date for determining shareholders
entitled to notice of, and to vote at, the Meeting, there were outstanding
12,171,314 shares of Common Stock. Each share of Common Stock is entitled to
one vote on each matter 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.
1
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 1, 1999, certain information
with respect to the beneficial ownership of the Company's Common Stock by each
director and nominee; the Chief Executive Officer, Andrew L. Rogal, and each of
the Company's four other most highly paid executive officers who own shares of
the Company's Common Stock, Timothy J. Korman, John P. McGrath, Richard F.
Galardini and Michael A. Janes (collectively, the Named Executive Officers);
and all directors and executive officers as a group. Except as otherwise
indicated, each individual named has sole investment and voting power with
respect to the shares shown. On March 1, 1999, the Company had 12,157,575
shares of Common Stock issued and outstanding. Each of the individuals listed
below is the owner of less than 1% of the shares outstanding, except for Robert
H. Hilb who would own 1.34% of the Common Stock issued and outstanding upon
exercise of his exercisable options. As a group, the directors and executive
officers would own 6.32% of the Common Stock issued and outstanding upon
exercise of their exercisable options.
<TABLE>
<CAPTION>
SHARES UNDER
NUMBER OF COMMON EXERCISABLE
NAME SHARES (1) OPTIONS (2)
- - ------------------------------------------ ------------------ -------------
<S> <C> <C>
Theodore L. Chandler, Jr. 10,000 21,500
Norwood H. Davis, Jr. 10,000 13,000
Philip J. Faccenda 100 13,000
J. S. M. French 40,000 21,500
Richard F. Galardini 8,408 3,750
Robert H. Hilb 157,400 5,000
Michael A. Janes 7,862 14,750
Timothy J. Korman 38,611 28,000
Anthony F. Markel 3,000 5,000
John P. McGrath 12,408 21,500
Thomas H. O'Brien (3) 7,127 21,500
Andrew L. Rogal (4) 64,798 55,500
Robert S. Ukrop (5) 18,148 21,500
All directors and executive officers as a
group (22 persons, including those
named) 440,942 349,200
</TABLE>
- - ---------
(1) The number of shares of Common Stock shown in the table includes 41,884
shares held for certain executive officers in the Company's qualified
retirement plans as of March 1, 1999.
(2) The number of shares indicated includes shares which may be acquired
through the exercise of stock options within sixty days after March 1,
1999, pursuant to the Company's 1986 Incentive Stock Option Plan, 1989
Stock Plan and Non-employee Directors Stock Incentive Plan.
(3) Includes 293 shares of Common Stock earned pursuant to the Non-employee
Directors Stock Incentive Plan as of March 1, 1999, and to be issued on
March 31, 1999.
(4) The number of shares indicated includes 17,300 shares held in a trust for
which Andrew L. Rogal is one of the trustees. Mr. Rogal, as a trustee,
shares voting and investment power for these shares; therefore, he
disclaims beneficial ownership thereof.
(5) 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; therefore, he disclaims beneficial ownership
thereof.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS
The following table sets forth 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 in filings by each reporting person with the Securities and Exchange
Commission (the Commission) under the Securities Exchange Act of 1934, as
amended (the Exchange Act).
<TABLE>
<CAPTION>
NUMBER OF COMMON
NAME AND ADDRESS SHARES AND NATURE PERCENT OF
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP CLASS (1)
- - ----------------------------------------- ------------------------- -----------
<S> <C> <C>
Southeastern Asset Management, Inc. (2) 2,543,500 20.9%
Longleaf Partners Small-Cap Fund
O. Mason Hawkins
6410 Poplar Avenue
Suite 900
Memphis, Tennessee 38119
Ryback Management Corporation (3) 996,100 8.2%
7711 Carondelet Avenue
Box 16900
St. Louis, Missouri 63105
I. G. Investment Management, Ltd. 748,650 (4) 6.2%
1 Canada Center
447 Portage Avenue
P. O. Box 5000
Winnipeg, Manitoba R3C 3B6
</TABLE>
- - ---------
(1) Based on 12,171,314 shares of Common Stock issued and outstanding on April
2, 1999.
(2) Southeastern Asset Management, Inc. (Southeastern), an Investment Adviser
registered under Section 203 of the Investment Advisers Act of 1940,
Longleaf Partners Small-Cap Fund (Longleaf), an Investment Company
registered under Section 8 of the Investment Company Act of 1940, and O.
Mason Hawkins (Hawkins) filed a joint Schedule 13G with the Commission
reporting beneficial ownership as of December 31, 1998, of 2,543,500
shares of Common Stock, which are held in various capacities. Southeastern
reported that it has sole voting power as to 620,100 shares, shared voting
power as to 1,777,400 shares, which are owned by Longleaf, which is a
series of Longleaf Partners Funds Trust, and no voting power as to 146,000
shares. Southeastern also reported that it has sole dispositive power as
to 766,100 shares and shared dispositive power as to 1,777,400 shares,
which are owned by Longleaf. Hawkins may be deemed to be a controlling
person of Southeastern as a result of his official positions with or
ownership of its voting securities; however, the existence of such control
is expressly disclaimed as Hawkins does not own directly or indirectly any
shares for his own account. 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.
(3) Ryback Management Corporation (Ryback), an Investment Adviser registered
under Section 203 of the Investment Advisers Act of 1940, filed a Schedule
13G with the Commission reporting beneficial ownership as of December 31,
1998, of 996,100 shares of Common Stock held by the Lindner Growth Fund
and by Ryback in a fiduciary capacity. Lindner Growth Fund is a separate
series of the Lindner Investment Series Trust, an Investment Company
registered under Section 8 of the Investment Company Act of 1940. Ryback
reported that 900,000 shares are held by the Lindner Growth Fund and
96,100 shares are managed by Ryback. Ryback also reported that it has sole
voting and dispositive power as to 996,100 shares of Common Stock. 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
3
<PAGE>
or as a participant in any transaction having such purpose or effect. On
information and belief, management believes that Ryback's Lindner Growth
Fund disposed of 900,000 shares on or around March 17, 1999.
(4) I. G. Investment Management, Ltd. (IG) filed a Form 13F with the Commision
reporting that as of December 31, 1998, it held 748,650 shares of Common
Stock in a fiduciary capacity and that it has sole voting and dispositive
power as to 748,650 shares of Common Stock. On March 29, 1999, IG filed a
Form 3 with the Commission which indicated that it has sole voting and
dispositive power as to 1,648,650 shares of Common Stock, of which 748,650
shares were held in its Investors U.S. Opportunities Fund, and 900,000
were held in its Investors U.S. Growth Fund. On information and belief,
management believes that IG acquired 900,000 shares from Ryback's Lindner
Growth Fund on or around March 17, 1999.
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 2002 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, three of whom are now directors 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 2002
Theodore L. Chandler, Jr., 46, 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 LandAmerica Financial Group, Inc. and
Open Plan Systems, Inc. Mr. Chandler is Chairman of the Nominating Committee
and a member of the Compensation Committee and the Executive Committee.
Norwood H. Davis, Jr., 59, has been Chairman of the Board and Chief
Executive Officer of Trigon Healthcare, Inc., a company providing health care
coverage and specialty health services in Virginia, since 1989 and has been a
director of the Company since 1994. He is a director of Trigon Healthcare, Inc.
and First Union Corporation. Mr. Davis is a member of the Compensation
Committee, Executive Committee and Nominating Committee.
Thomas H. O'Brien, 62, 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
Chairman of the Compensation Committee and a member of the Executive Committee
and Nominating Committee.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
NOMINEES SET FORTH ABOVE.
INCUMBENT DIRECTORS WHOSE TERMS EXPIRE AT 2000 ANNUAL MEETING
Robert H. Hilb, 71, has been Chairman of the Company since 1991 and has
been a director of the Company since 1982. He was Chief Executive Officer of
the Company from 1991 to May 1997 and was President of the Company from 1982 to
1995. Mr. Hilb is a member of the Executive Committee, Nominating Committee and
Compensation Committee.
Andrew L. Rogal, 50, has been Chief Executive Officer of the Company since
May 1997 and President of the Company since 1995 and has been a director of the
Company since 1989. He was Chief Operating Officer of the Company from
4
<PAGE>
1995 to May 1997. He was Executive Vice President of the Company from 1991 to
1995. He was Chief Executive Officer of Hilb, Rogal and Hamilton Company of
Pittsburgh, Inc., a subsidiary of the Company, from 1990 to 1995. Mr. Rogal is
Chairman of the Executive Committee.
Philip J. Faccenda, 69, 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. 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 a member of the Audit
Committee.
INCUMBENT DIRECTORS WHOSE TERMS EXPIRE AT 2001 ANNUAL MEETING
J.S.M. French, 58, has been President of Dunn Investment Company, a
construction materials and construction investment company in Birmingham,
Alabama, since 1978 and has been a director of the Company since 1984. He is a
director of Regions Financial Corporation, Energen Corporation and Protective
Life Corporation. Mr. French is a member of the Audit Committee.
Robert S. Ukrop, 52, has been President and Chief Operating Officer of
Ukrop's Super Markets, Inc., a company owning 26 retail food stores and 3 food
manufacturing facilities in Central 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, Administration and Finance of the Company.
Mr. Ukrop is Chairman of the Audit Committee.
Anthony F. Markel, 57, has been President and Chief Operating Officer of
Markel Corporation, an insurance company comprised of five operating units
underwriting specialty insurance products and programs to a variety of niche
markets, headquartered in Richmond, Virginia, since March 1992. He is a
director of Markel Corporation and Open Plan Systems, Inc. Mr. Markel is a
member of the Audit Committee.
ARRANGEMENTS WITH RESPECT TO AN INCREASE
IN THE NUMBER OF DIRECTORS SERVING ON THE BOARD OF DIRECTORS
On March 29, 1999, the Company entered into a Stock Purchase Agreement
with PM Holdings, Inc. (Holdings), Phoenix Home Life Mutual Insurance Company
(PHL) and Martin L. Vaughan, III to acquire all of the issued and outstanding
shares of capital stock of American Phoenix Corporation (APC)(the Acquisition).
The Acquisition is expected to close in May 1999, subject to regulatory
approval and satisfaction of certain conditions to closing. Upon the closing of
the Acquisition, the Company will enter into a Voting and Standstill Agreement
(the Voting Agreement) with Holdings and PHL that provides, among other things,
that the Company will expand the Board of Directors from 9 to 13 directors upon
the later of the closing date of the Acquisition or the date of the 1999 Annual
Meeting and fill the vacancies created thereby with individuals designated in
accordance with the Voting Agreement. The individuals who are expected to fill
the vacancies are Martin L. Vaughan, III, President and Chief Executive Officer
of APC, Robert W. Fiondella, Chairman, President and Chief Executive Officer of
PHL, David W. Searfoss, Executive Vice President and Chief Financial Officer of
PHL, and Timothy J. Korman, Executive Vice President, Administration and
Finance of the Company. Each director elected to fill a vacancy pursuant to the
Voting Agreement will serve until the next annual meeting of shareholders. The
Company has agreed to nominate each such individual for election by the
shareholders at the 2000 Annual Meeting of Shareholders.
5
<PAGE>
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 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. Refer to "Proposals for 2000 Annual Meeting."
In 1998, there were four meetings of the Board of Directors, two meetings
of the Audit Committee, five meetings of the Compensation Committee and two
meetings of the Executive Committee. 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 employee of the Company receives an annual
retainer of $14,000, a fee of $2,500 for each Board meeting attended and a fee
of $750 for each committee meeting attended. 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. On
February 3, 1998, the Board of Directors approved the Amended and Restated
Outside Directors Deferral Plan (the Amended and Restated Plan), which
supersedes the Outside Directors Deferral Plan with an effective date of
January 1, 1995. Under the Amended and Restated Plan, directors of the Company
who are not employees of the Company may elect to defer all or part of their
annual fees and meeting fees in Deferred Stock Units. Each Deferred Stock Unit
represents a hypothetical share of the Company's Common Stock. A participant's
Deferred Stock Unit Account is increased by phantom dividends equal to the
Common Stock dividends paid by the Company. Those directors who elect to defer
100% of their total compensation into Deferred Stock Units for a given year
shall receive additional compensation in the form of Deferred Stock Units equal
to 30% of their total compensation. Any amounts deferred under the former
Outside Directors Deferral Plan will continue to be credited with interest
annually at the rate of return set forth in the Amended and Restated Plan,
which is currently 9%.
On May 5, 1998, the shareholders of the Company approved the Non-employee
Directors Stock Incentive Plan which provides that each non-employee director
will receive a grant of an option to purchase 5,000 shares of the Common Stock
on the first business day following the Annual Meeting of Shareholders.
Therefore, pursuant to said plan, on May 6, 1998, Theodore L. Chandler, Jr.,
Norwood H. Davis, Jr., Philip J. Faccenda, J.S.M. French, Robert H. Hilb,
Anthony F. Markel, Thomas H. O'Brien and Robert S. Ukrop were each granted an
option to purchase 5,000 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. The amounts accrued for the director under the former plan
and the Amended and Restated Plan are paid out in cash, in installments or in a
lump sum, at the director's irrevocable election. Also, pursuant to the
Company's Non-employee Directors Stock Incentive Plan, directors may elect to
receive some or all of their fees in shares of the Company's Common Stock.
Those directors electing to receive 100% of their fees in Common Stock receive
additional compensation in the form of Common Stock equal to 30% of their
compensation.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers and persons who beneficially own
more than 10% of the Company's Common Stock to file initial reports of
ownership and reports of changes in ownership of Common Stock with the
Securities and Exchange Commission. Such persons are required by Commission
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely upon a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, the Company believes that applicable Section 16(a)
filing requirements were satisfied for transactions that occurred in 1998.
6
<PAGE>
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, Andrew L. Rogal 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 1998.
ROLE OF COMPENSATION COMMITTEE
Decisions on compensation of certain executive officers of the Company are
made by the Compensation Committee of the Board. 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 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 of Directors.
The following is the text of the report adopted by the Compensation
Committee with respect to executive compensation for 1998.
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.
To further this mutuality of interests, the Insider Stock Ownership Plan
was adopted in 1998 to align the interests of senior management with the
shareholders by requiring senior management to attain certain stock ownership
levels and therefore maintain a vested interest in the equity performance of
the Company. Over a five year period, the executives covered by such plan are
expected to reach a prescribed ownership level, which is expressed as a
multiple of the executive's base salary and which ranges from five times base
salary to one times base salary depending on the executive's position. By
December 31, 1998, all named executive officers had achieved their respective
goals.
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 1998 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. 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, the
Compensation Committee undertakes this assessment process annually, or more
frequently, in order to implement the Company's aggressive 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.
7
<PAGE>
1998 BASE SALARIES AND ANNUAL INCENTIVES
On June 1, 1997, the Company entered into an employment agreement with
Andrew L. Rogal to serve as Chief Executive Officer of the Company. In 1997,
under the Employment Agreement, Mr. Rogal received an annual base salary of
$400,000, which is reviewed annually by the Committee to consider appropriate
increases. Mr. Rogal's base salary for 1998 was $422,500. This annual base
salary was set based on Mr. Rogal's individual duties and responsibilities, his
tenure and salaries paid to the chief executive officers of the Company's peer
group companies. In addition, Mr. Rogal is to receive an annual incentive bonus
as established and modified from time to time by the Committee. In awarding the
annual incentive bonus to Mr. Rogal for 1998, the Committee considered his
individual merit and achievement in attaining annual performance goals, the
Company's financial success and Mr. Rogal's leadership in strategically
focusing the Company. Mr. Rogal is also entitled to receive stock option awards
as determined by the Committee.
The Company's other executive officers are also eligible for an annual
management incentive award in the form of a cash bonus. On May 5, 1998, the
Committee approved the 1998 Corporate Incentive Plan for certain key executives
of the Company. 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 by providing a pool based on increased
earnings per share. Under the Plan, those individuals responsible for
overseeing and driving the strategic initiatives of the Company and for the
overall earnings per share of the Company are eligible to participate in the
executive bonus pool. The available dollar pool is based on improved earnings
per share. In January, 1999, utilizing the aforementioned factors, the
Committee awarded Mr. Rogal an incentive bonus of $384,000 out of the pool for
his 1998 performance.
1998 STOCK OPTION AWARDS AND OTHER LONG TERM INCENTIVES
On May 5, 1998, the Compensation Committee granted non-qualified stock
options (the 1998 Options) to certain key executives of the Company, including
the Named Executive Officers, in order to align key employees with the
direction of the Company and to create a more performance oriented corporate
culture. The exercise price of the 1998 Options was based on the closing sales
price of the Common Stock as reported on the New York Stock Exchange on May 5,
1998, the date of grant, which was $17.6875. The right to exercise the 1998
Options vests at a rate of 25% of the aggregate number of shares covered by
such options on each May 5 up to a total of four full years. The Committee
granted Mr. Rogal 1998 Options to acquire 30,000 shares of Common Stock.
In determining the number of shares to be subject to the options granted
to Mr. Rogal the Committee evaluated Mr. Rogal's overall compensation package
relative to that of other chief executives in the industry peer group. With
respect to the allocation of available options among the named executive
officers and other executives, the Committee is of a view that as the person's
level of responsibility increases, greater portions of his or her total
compensation should be linked to the long-term performance of the Company's
Common Stock and return to its shareholders.
TAX CONSIDERATIONS
The Omnibus Budget Reconciliation Act of 1993 established certain criteria
for the tax deductibility of compensation in excess of $1.0 million paid to the
Company's executive officers. The Company is not in danger of losing deductions
under the law. The Committee will carefully consider any plan or compensation
arrangement that would result in the disallowance of compensation deductions.
The Committee will use its best judgment in such cases, taking all factors into
account, including the materiality of any deductions that may be lost. To date,
the Committee has not adopted a policy that dictates its decision in such a
situation.
The tables which follow this report, and accompanying narrative and
footnotes, reflect the decisions covered by the above discussion.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE COMPANY'S
BOARD OF DIRECTORS:
Thomas H. O'Brien, Chairman
Theodore L. Chandler, Jr.
Norwood H. Davis, Jr.
Robert H. Hilb
8
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
Theodore L. Chandler, Jr., a member of the Company's Compensation
Committee, is a principal in the law firm of Williams, Mullen, Christian &
Dobbins, Richmond, Virginia, which serves as outside counsel to the Company.
Robert H. Hilb, a member of the Company's Compensation Committee, is the former
Chief Executive Officer of the Company and currently holds the position of
Chairman.
SUMMARY COMPENSATION TABLE
The following table sets forth the annual and long-term compensation paid
by the Company to each of the Named
<TABLE>
<CAPTION>
Executive Officers for the fiscal years ended December 31, 1998, 1997 and 1996.
LONG-TERM
COMPENSATION
AWARDS
SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND COMPENSATION OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(1) ($)(2) (#)(3) COMPENSATION ($)
- - ------------------------------ ------ ------------ -------------- -------------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Andrew L. Rogal 1998 413,126 384,000 -- 30,000 30,569(4)(5)
President and Chief 1997 360,428 325,000 -- 60,000 105,776(4)(5)
Executive Officer 1996 305,000 -- -- -- 98,317(4)(5)
Timothy J. Korman 1998 206,563 196,300 -- 13,000 22,046(4)(5)
Executive Vice President, 1997 183,333 150,000 -- 30,000 34,119(4)(5)
Administration and Finance 1996 140,000 35,000 -- -- 28,937(4)(5)
Richard F. Galardini 1998 350,016 88,200 -- 9,000 13,126(4)(5)
Vice President 1997 270,215 -- -- 15,000 8,000(4)
1996 175,000 -- -- -- 7,500(4)
Michael A. Janes 1998 205,984 170,000 -- 10,000 7,576(4)(5)
Vice President 1997 182,500 127,702 -- 25,000 8,000(4)
1996 160,000 48,235 -- -- 7,500(4)
John P. McGrath 1998 291,586 250,000 -- 12,000 10,950(4)(5)
Vice President 1997 251,356 234,897 -- 30,000 8,000(4)
1996 202,800 -- -- -- 7,500(4)
</TABLE>
- - ---------
(1) Bonuses reported in the table reflect the amount earned by the Named
Executive Officer for each year shown. Payment of such bonuses occurred in
the year following the year in which such bonuses were earned.
(2) 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.
(3) The stock options detailed above, granted pursuant to the Company's 1989
Stock Plan in May 1998 and June of 1997, contain a provision whereby the
right to exercise such options vests at a rate of 25% 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 four full years of continued employment by the Company, and
expire seven years from grant date.
(4) The amount shown for each Named Executive Officer for 1998 includes the
Company's profit sharing and 401(k) matching contributions as follows: Mr.
Rogal, $4,900; Mr. McGrath, $5,687; Mr. Galardini, $5,525; Mr. Janes,
$5,913; and Mr. Korman, $5,900. The amount shown for each Named Executive
Officer for 1997 includes the Company's profit sharing and 401(k) matching
contributions as follows: Mr. Rogal, $8,000; Mr. McGrath, $8,000; Mr.
Galardini, $8,000; Mr. Janes, $8,000; and Mr. Korman, $8,000. The amount
shown for each Named Executive Officer for 1996 includes the Company's
profit sharing and 401(k) matching contributions as follows: Mr. Rogal,
$7,500; Mr. McGrath, $7,500; Mr. Galardini, $7,500; Mr. Janes, $7,500; and
Mr. Korman, $7,000.
9
<PAGE>
(5) The amount shown for each Named Executive Officer for 1998 includes the
Company's expense to the Supplemental Executive Retirement Plan as
follows: Mr. Rogal, $25,669 ($10,125 contribution and $15,544 interest
accrual); Mr. McGrath, $5,263; Mr. Galardini, $7,601; Mr. Janes, $1,663
and Mr. Korman, $16,146 ($4,131 contribution and $12,015 interest
accrual). The amount shown for each Named Executive Officer for 1997
includes the Company's expense to the Supplemental Executive Retirement
Plan as follows: Mr. Rogal, $97,776 and Mr. Korman, $26,119. The amount
shown for each Named Executive Officer for 1996 includes the Company's
expense to the Supplemental Executive Retirement Plan as follows: Mr.
Rogal, $90,817 and Mr. Korman, $21,937.
OPTION GRANTS IN LAST FISCAL YEAR
The following table summarizes all individual grants of stock options to
each of the Named Executive Officers during fiscal year 1998. No stock
appreciation rights (SARs) were granted in fiscal year 1998. There are no
outstanding SARs.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------------------
NUMBER OF % OF TOTAL EXERCISE
SECURITIES OPTIONS GRANTED OR BASE GRANT DATE
UNDERLYING EMPLOYEES IN PRICE EXPIRATION PRESENT VALUE
NAME OPTIONS GRANTED (1) FISCAL YEAR (2) ($/SH) DATE ($)(3)
- - ------------------------ --------------------- ----------------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Andrew L. Rogal 30,000 12.58% 17.6875 05/05/2005 113,400
Timothy J. Korman 13,000 5.45% 17.6875 05/05/2005 49,140
Richard F. Galardini 9,000 3.78% 17.6875 05/05/2005 34,020
Michael A. Janes 10,000 4.19% 17.6875 05/05/2005 37,800
John P. McGrath 12,000 5.03% 17.6875 05/05/2005 45,360
</TABLE>
- - ---------
(1) The stock options detailed above, granted pursuant to the Company's 1989
Stock Plan in May 1998, contain a provision whereby the right to exercise
such options vests at a rate of 25% 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 four full
years of continued employment by the Company, and expire seven years from
grant date.
(2) The total number of shares of Common Stock which may be acquired pursuant
to options granted to employees of the Company in 1998 was 238,400.
(3) The Black-Scholes stock option valuation method was used to determine the
"Grant Date Present Value" of options listed in the table. The model used
assumed a stock price volatility of .213; a risk-free interest rate of
5.78%; and an annual dividend yield of 3.62%. Because the magnitude of any
nontransferability discount is extremely difficult to determine, none was
applied in determining the value of the listed options. The grant date
present values set forth in the table are only theoretical values and may
not accurately determine present value. The actual value, if any, an
optionee will realize will depend on the excess of market value of the
Company's Common Stock over the exercise price on the date the option is
exercised.
10
<PAGE>
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, 1998. Mr.
Janes and Mr. Korman were the only Named Executive Officers to exercise options
during 1998. There are no outstanding SARs.
<TABLE>
<CAPTION>
NUMBER OF SECURITES VALUE OF
UNDERLYING UNEXERCISED UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL YEAR END OPTIONS AT FISCAL YEAR END
(#)(2) ($)(3)
SHARES ACQUIRED ---------------------------- ---------------------------
NAME ON EXERCISE VALUE REALIZED ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- - ------------------------ ---------------- ---------------------- ---------------------------- ---------------------------
<S> <C> <C> <C> <C>
Andrew L. Rogal N/A N/A 55,500 / 75,000 304,813 / 240,000
Timothy J. Korman 3,000 26,625 28,000 / 35,500 154,500 / 115,625
Richard F. Galardini N/A N/A 3,750 / 20,250 14,531 / 63,281
Michael A. Janes 1,000 3,063 14,750 / 28,750 72,531 / 94,531
John P. McGrath N/A N/A 21,500 / 34,500 112,813 / 113,438
</TABLE>
- - ---------
(1) The value realized represents the difference between the exercise price of
the option and the fair market value of the Company's stock on the date of
exercise.
(2) 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, 1998. Since that date, no additional stock options for the
Named Executive Officers became exercisable within sixty days after March
1, 1999, and are reflected in the "Security Ownership of Management"
table.
(3) The value of in-the-money options at fiscal year end was calculated by
determining the difference between the closing price of $19.875 per share
of the Company's Common Stock on the New York Stock Exchange on December
31, 1998, the last trading day of the fiscal year, and the exercise price
of the options.
PROFIT SHARING SAVINGS PLAN
The Company has 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 profit sharing contribution
percentage to the Profit Sharing Plan based on the net earnings of the Company
and the Company's matching contribution. As of April 1, 1998, the Profit
Sharing Plan was amended to provide that the Company's matching contribution
would increase from 50% of the first 4% of a participant's salary reduction to
100% of the first 3% of a participant's salary reduction. For 1998, the Company
profit sharing contribution was 1% of participating employees' eligible
compensation and the Company matching contribution was $19,925 under the salary
reduction provision of the Profit Sharing Plan.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Named Executive Officers participate in the Company's Supplemental
Executive Retirement Plan (the SERP), which as of January 1, 1998, was amended
and restated to convert the plan from a defined benefit arrangement to a
defined contribution arrangement, to provide a contribution to participants
equal to the Company's profit sharing and matching contributions applied to the
participants' base salary in excess of the Internal Revenue Service (the IRS)
maximum allowable salary for qualified plans, which was $160,000 for 1998. The
SERP was further amended to allow all current and future employees earning in
excess of the IRS maximum allowable salary for qualified plans to become
participants in the plan, to grandfather the current participants and provide
these individuals with a contribution each year equal to the greater of a fixed
2% contribution of their base salary or the calculation for regular
participants, to convert the vested benefit accrued for current participants to
a cash balance as of December 31, 1997, and to add a provision wherein
terminated or retired participants who are employed by a competing entity of
the Company will forfeit their remaining account balance.
Contributions to the SERP for 1998 for each of the Named Executive
Officers were as follows: Mr. Rogal, $10,125; Mr. Korman, $4,131; Mr.
Galardini, $7,601; Mr. Janes, $1,663; and Mr. McGrath, $5,263. For all
executive officers as a
11
<PAGE>
group, the 1998 contribution to the SERP was $40,447. Finally, Mr. Rogal and
Mr. Korman, pursuant to the defined benefit each had accrued under the SERP
prior to its conversion to a defined contribution plan, were credited with
interest accruals to their balances of $15,544 and $12,015, respectively.
EMPLOYMENT AGREEMENTS
Mr. Rogal entered into an employment agreement with the Company on June 1,
1997, for an original term of five years. The agreement provides for an annual
review of his salary by the Compensation Committee of the Board of Directors of
the Company to consider appropriate increases, but in no event shall his base
annual salary of $400,000 be reduced. The agreement may be terminated by the
Company with or without proper cause; however, should the agreement be
terminated without proper cause, Mr. Rogal would be entitled to receive
compensation, annual incentive bonus and benefits until the expiration of the
five year term of employment. The annual incentive bonus would be equal to the
greater of the highest annual incentive bonus payment previously received by
Mr. Rogal during the term of the aforementioned agreement or the sum of
$100,000.
Messrs. McGrath, Galardini, Janes and Korman are each 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 and any pro-rated portion of any applicable incentive.
All of the employment agreements contain restrictive covenants relating to
the protection of confidential information and clients of the Company.
CHANGE OF CONTROL EMPLOYMENT AGREEMENTS
To ensure continuity and the continued dedication of key executives during
any period of uncertainty caused by the threat or occurrence of a takeover, the
Company has entered into change of control employment agreements with its
executive officers, including each of the Named Executive Officers named in the
Summary Compensation Table.
In the event there is a change of control of the Company, the executive
will be employed for a period of three years after the change of control. If
the employment of the executive terminates at any time during the three year
period following a change of control for any reason other than death, cause or
the executive's election, the executive will receive an agreed upon amount of
severance pay equal to two to three times such executive's highest applicable
annual salary and bonus. Additionally, the executive would be eligible to
receive benefits substantially equivalent to those which would have been
received under the Company's qualified and non-qualified plans. The change of
control employment agreements provide that any excise taxes shall be paid by
the Company, as well as any legal expenses of the executive. If an executive
elects to terminate his employment in the first year after the change of
control, but without any deemed breach by the Company or its successor, the
executive shall be entitled to severance equal to one-half to one times the
executive's highest applicable annual salary and bonus.
Mr. Rogal and Mr. Korman each have a change of control employment
agreement which provides for a three times severance formula (except for death
or cause) and a one-time severance formula for a voluntary termination in the
first year after the change of control. The change of control agreements for
the other Named Executive Officers provide for a two times and a one-half times
severance formula.
OTHER AGREEMENTS
Effective as of January 1, 1996, Mr. Galardini sold an interest in certain
employee benefits business to the Company's Pittsburgh office. Pursuant to the
terms of such agreement, for each of the calendar years 1996 through 2000, Mr.
Galardini would receive the lesser of 10% of the revenues realized or $150,000.
Additionally, Mr. Galardini could, subject to certain conditions, receive the
same amounts for each of the calendar years 2001 through 2005. For each of
1996, 1997 and 1998, Mr. Galardini received the maximum payment of $150,000.
12
<PAGE>
PERFORMANCE GRAPH
The following Performance Graph sets forth the Company's cumulative total
shareholder return on its Common Stock, assuming reinvestment of dividends,
with the cumulative total return on the published Standard & Poor's 500 Stock
Index and the cumulative total return on the Company-constructed composite
industry index, consisting of (i) Arthur J. Gallagher & Co., Poe & Brown, Inc.,
Marsh & McLennan Cos., Inc., and Aon Corporation, over the five year period
ended December 31, 1998. The Company selected the businesses in the composite
industry index in its good faith belief that these other public companies are
most similar to the Company's insurance agency business.
[GRAPH]
HRH S&P 500 INDEX PEER GROUP
1993 100 100 100
1994 100 101 101
1995 116 139 134
1996 120 171 163
1997 181 229 238
1998 193 294 263
13
<PAGE>
INDEPENDENT AUDITORS
Ernst & Young, LLP was the auditor for the fiscal year ended December 31,
1998, and the Audit Committee has selected it as auditor for the year ending
December 31, 1999. A representative of Ernst & Young, LLP will be present at
the meeting with the opportunity to make a statement or respond to appropriate
questions from shareholders.
PROPOSALS FOR 2000 ANNUAL MEETING
Under the regulations of the Commission, any shareholder desiring to make
a proposal to be acted upon at the 2000 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 December 17, 1999, 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 2000 Annual
Meeting of Shareholders on May 2, 2000.
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 or to bring
other business before a meeting, 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 date of the meeting. Based on an anticipated date of May 2, 2000, for
the 2000 Annual Meeting of Shareholders, the Company must receive such notice
no later than March 3, 2000, and no earlier than February 2, 2000. Notice of a
nomination for director must describe various matters regarding the nominee and
the shareholder giving notice. Notice of other business to be brought before
the meeting 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, 1998, 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 1998 FILED WITH THE COMMISSION CAN
BE OBTAINED WITHOUT CHARGE BY WRITING TO THE CORPORATE SECRETARY, 4235 INNSLAKE
DRIVE, P.O. BOX 1220, GLEN ALLEN, VIRGINIA 23060-1220.
14
<PAGE>
HILB, ROGAL AND HAMILTON COMPANY
TO TRUSTEE, HRH RETIREMENT SAVINGS PLAN
AND HRH FROZEN RETIREMENT SAVINGS PLAN
This Voting Instruction is Solicited on Behalf of the
Board of Directors of Hilb, Rogal and Hamilton Company
Pursuant to Section 12.9 of the HRH Retirement Savings Plan and HRH Frozen
Retirement Savings Plan of Hilb, Rogal and Hamilton Company, you are directed to
vote, in person or by proxy, the whole shares of Common Stock of Hilb, Rogal and
Hamilton Company credited to the undersigned Participant's Account as of April
2, 1999, at the Annual Meeting of Shareholders of Hilb, Rogal and Hamilton
Company to be held at The Jefferson Hotel, 101 West Franklin Street, Richmond,
Virginia, on June 8, 1999, at 10:00 a.m., Eastern Time, or any adjournments or
postponements thereof, upon the matters listed on the reverse side as more fully
set forth in the Proxy Statement and upon any and all other matters that may be
properly be brought before such Annual Meeting or any adjournments or
postponements thereof.
THIS VOTING INSTRUCTION, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED ON THE REVERSE SIDE BY THE UNDERSIGNED PARTICIPANT. IF NO DIRECTION IS
MADE, OR IF A VOTING INSTRUCTION IS NOT PROPERLY EXECUTED AND RECEIVED BY THE
TRUSTEE, THE SHARES CREDITED TO YOUR PARTICIPANT'S ACCOUNT SHALL BE VOTED IN THE
SAME PROPORTION AS THOSE SHARES FOR WHICH THE TRUSTEE HAS RECEIVED PROPER VOTING
INSTRUCTIONS.
PLEASE MARK, DATE, SIGN AND RETURN PROMPTLY
<PAGE>
HILB, ROGAL AND HAMILTON COMPANY
HRH RETIREMENT SAVINGS PLAN AND
HRH FROZEN RETIREMENT SAVINGS PLAN
This proxy when properly executed will be voted in the manner directed by the
undersigned shareholder.
1. ELECTION OF DIRECTORS FOR INSTRUCTIONS: To
THREE YEAR TERMS EXPIRING withhold authority to vote for
AT THE 2002 ANNUAL MEETING: any individual nominee, write
each such nominee's name in
the following space:
------------------------
FOR Nominees WITHHOLD
Theodore L. Chandler, Jr. AUTHORITY
Norwood H. Davis, Jr. to vote for all
Thomas H. O'Brien such nominees
RECORD DATE SHARES:
Please be sure to sign and date this Voting Instruction. Please sign
exactly as name(s) appear(s) hereon.
Participant Sign Here Date
DETACH CARD
PROXY
HILB, ROGAL AND HAMILTON COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The shareholder shown on the reverse side hereby appoints Andrew L. Rogal,
Timothy J. Korman and Walter L. Smith and each or any of them, proxy for said
shareholder, with power of substitution, to vote all the shares of Common Stock
of Hilb, Rogal and Hamilton Company held of record by said shareholder on April
2, 1999, at the Annual Meeting of Shareholders to be held at 10:00 a.m., June 8,
1999, and at any adjournments thereof, upon the matters designated on the
reverse side 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
<PAGE>
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
Item 1.
1. ELECTION OF DIRECTORS FOR INSTRUCTIONS: To
THREE YEAR TERMS EXPIRING withhold authority to vote for
AT THE 2002 ANNUAL MEETING: any individual nominee, write
each such nominee's name in
the following space:
------------------------
FOR Nominees WITHHOLD
Theodore L. Chandler, Jr. AUTHORITY
Norwood H. Davis, Jr. to vote for all
Thomas H. O'Brien such nominees
2. 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. When shares
are held by joint tenants, both should sign. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title of
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.
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.
Signature(s) ________________ Signature(s) ________________ Date _________
- - --------------------------------------------------------------------------------
Fold and Detach Here
<PAGE>
ANNUAL MEETING
of
HILB, ROGAL AND HAMILTON COMPANY
Monday, June 8, 1999
10:00 a.m.
The Jefferson Hotel
101 West Franklin Street
Richmond, Virginia
Agenda
o Election of Directors
o Report on the Progress of the Company
