UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
April 24, 2013
Registrant's Telephone Number, Including Area Code: (614) 255-3333
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Section 5 - Corporate Governance and Management
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
(e) On April 24, 2013, the Board of Directors of Diamond Hill Investment Group, Inc. (the "Company") approved the Diamond Hill Fixed Term Deferred Compensation Plan (the "Fixed Term Plan") and the Diamond Hill Variable Term Deferred Compensation Plan (the "Variable Term Plan", and along with the Fixed Term Plan, each a "Plan" and collectively, the "Plans"). R. H. Dillon, the Company's President and Chief Executive Officer, is eligible to participate in the Variable Term Plan, along with each person employed by the Company or any of its affiliates as a portfolio manager or research analyst who is a member of a select group of management or highly compensated employees. James F. Laird, the Company's Secretary, Treasurer and Chief Financial Officer, is eligible to participate in the Fixed Term Plan, along with each person employed by the Company or any of its affiliates who is not a portfolio manager or research analyst. Brief descriptions of the terms and conditions of the Plans are provided below. The summaries and descriptions of the Plans are qualified in their entirety by reference to the Fixed Term Plan and Variable Term Plan, copies of which are attached hereto as Exhibits 10.1 and 10.2, respectively.
Deferrals of Incentive Compensation. Pursuant to the Plans, participants may elect to defer certain Incentive Compensation, defined as the gross amount that is earned by a participant under any bonus plan maintained by the Company or any of its affiliates, excluding base salary. Participants may elect to defer up to 50% of the stock portion of their annual bonus and up to 100% of the cash portion of their annual bonus for a Plan Year (the calendar year). After the applicable deadline, a deferral election is irrevocable for that Plan year unless otherwise permitted under that Plan. Generally, the participant must submit a deferral election by December 31 of the year before the services are to be performed.
Earnings. The deferred Incentive Compensation, if any, is credited to an account for that Plan Year. The participant is 100% vested in the account, although the account is subject to the terms and conditions of the Company's Compensation Recoupment and Restitution Policy. The account will be credited with earnings and losses based on the performance of the investment selections in the participant's account.
Plan Funding. The Plans are unfunded, unsecured promises by the Company to pay the account balances under the Plans at a later date. Participants have only the rights of general unsecured creditors of the Company and do not have any interest in or right to any specific asset of the Company.
Plan Amendment and Termination. The Company may amend, modify, suspend or terminate the Plans at any time without any participant's consent unless it would retroactively reduce a participant's account balance.
Distributions Generally.
Fixed Term Plan
Under the Fixed Term Plan, the account for each Plan Year will be distributed in a single lump sum payment within 90 days following the fifth anniversary of the date the Incentive Compensation was deferred except in the event of death, Disability or a Change in Control. For example, if the participant elects to defer payment of a portion of the annual bonus paid for services performed in 2014, the participant will not receive payment until 2020 regardless of whether the participant's employment terminates prior to such date.
Variable Term Plan
Under the Variable Term Plan, the participant must elect when they wish to receive distribution of the portion of their account attributable to that Plan Year when the participant submits the Deferral Election Form to defer payment. The participant may elect to receive the account:
- In a single lump sum payment within 90 days following either:
(1) the termination of employment, or
(2) the earlier of
(A) the termination of employment, or
(B) on a specified date which is at least five years after the annual
bonus was deferred; or
- In substantially equal annual installments for up to five years beginning
on the January 1 following either:
(1) the termination of employment, or
(2) the earlier of
(A) the termination of employment, or
(B) on a specified date which is at least five years after the annual
bonus was deferred.
In no event will a distribution occur before the fifth anniversary of the date the Incentive Compensation is deferred except for death, Disability or Change in Control. For example, if the participant elects to defer payment of a portion of the annual bonus for services performed in 2014 until the termination of employment and the participant terminates employment in 2018, the participant will not receive payment until 2020. If the participant is a "specified employee" of the Company within the meaning of the Internal Revenue Code, any distribution payable upon the termination of employment will not be, or begin to be, distributed until six months after the date of the termination of employment.
Under the Variable Term Plan, the participant may change the time or form of distribution by making an election to do so not less than 12 months before the date payment is scheduled to be made or begin. The election will not be effective for 12 months, and the distribution must be deferred at least five years from the date the amount would otherwise have been paid. For example, if a participant elects to have a portion of the 2013 annual bonus paid in 2020, the new election must be made at least 12 months prior to January 1, 2020 and the participant must elect to receive payment in 2025 or later.
Distributions Upon Death, Disability or Change in Control. In the event of death or Disability (as defined in the Plans), the participant's account will be distributed to the participant or the participant's beneficiary, as applicable, in a lump sum within 90 days after the event. In the event that the Company undergoes a Change in Control (as defined in the Plans), the account will be distributed in a lump sum within 30 days after the Change in Control.
The Diamond Hill Investment Group, Inc. (the "Company") 2013 Annual Meeting of Shareholders was held on April 24, 2013.
The matters voted upon at the annual meeting and the results of the vote were as follows:
1.) To elect seven directors to the Board of Directors of the Company to hold office until the next annual meeting of shareholders or until his or her successor is duly elected and qualified or until his or her earlier death, resignation, retirement, disqualification or removal.
Each of the seven nominees for director were elected, and the voting results are set forth below:
Name of Director For Withheld Not Voted ------------------------ --------- -------- --------- R.H. Dillon 2,381,561 10,540 839,217 Randolph J. Fortener 2,381,461 10,640 839,217 James F. Laird 2,323,255 68,846 839,217 Peter J. Moran 2,342,567 49,534 839,217 Donald B. Shackelford 2,353,269 38,832 839,217 Bradley C. Shoup 2,375,456 16,645 839,217 Frances A. Skinner 2,330,718 61,383 839,217 |
2.) To ratify the appointment of KPMG LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2013.
The ratification of KPMG LLP was approved, and the voting results are set forth below:
For Against Abstain --------- ------- ------- 2,970,946 43,346 200 |
3.) To approve, on an advisory basis, the compensation of the Company's executive officers.
The compensation of the Company's executive officers was approved, and the voting results are set forth below:
For Against Abstain Not Voted --------- ------- ------- --------- 2,339,442 50,741 1,818 839,317 |
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(a) - (c) Not applicable.
(d) Exhibits. Exhibit No. Description ----------- ------------------------------------------------------ 10.1 Diamond Hill Fixed Term Deferred Compensation Plan 10.2 Diamond Hill Variable Term Deferred Compensation Plan |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
DIAMOND HILL INVESTMENT GROUP, INC.
Date: April 30, 2013 By: /s/ James F. Laird
-------------------------------
James F. Laird, Chief Financial
Officer and Secretary
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DIAMOND HILL
FIXED TERM DEFERRED COMPENSATION PLAN
1.00 Purpose As of the Effective Date, the Company adopts this Plan for the purpose of allowing certain employees the opportunity to defer compensation for a fixed period of time. This Plan does not provide retirement income or systemically defer compensation until termination of employment. This Plan is not, and is not intended to be, an "employee pension benefit plan" within the meaning of, or subject to, the provisions of ERISA.
2.00 Definitions Whenever used in this Plan, the following terms have the meanings given to them in this Article 2.00, unless another meaning is expressly provided elsewhere in this Plan. Also, the form of any term will include all of its other forms.
2.01 Account: A bookkeeping account established for each Participant under Section 6.01 of this Plan.
2.02 Affiliate: Any entity that, along with the Company, would be considered a single employer under Code 414(b) and 414(c).
2.03 Beneficiary: The person or persons designated by a Participant to receive any portion of such Participant's Plan Benefit that is unpaid at the Participant's death. Such designation shall be made on a form prescribed by the Plan Administrator and shall be effective only when filed with the Plan Administrator. If a Participant has not made an effective designation of a Beneficiary or Beneficiaries, the Participant's Beneficiary will be his or her surviving spouse or, if there is no surviving spouse, the Participant's estate. The identity of a Participant's Beneficiary will be based only on the information included on the latest beneficiary designation form filed by the Participant with the Plan Administrator and will not be inferred from any other evidence.
2.04 Board: The Board of Directors of the Company.
2.05 Change in Control: Provided that such definition shall be interpreted in a manner that is consistent with the definition of a "change in control event" under Code 409A and Treasury Regulation 1.409A-3(i)(5), a "Change in Control" of the Company shall mean the first to occur of any of the following:
(a) the date that any person, or more than one person
acting as a group, acquires ownership of stock of the
Company that, together with stock already held by such
person or group, constitutes more than fifty percent (50%)
of the total fair market value or total voting power of the
stock of the Company;
(b) the date that any one person, or more than one person acting
as a group, acquires (or has acquired during the twelve (12)
month period ending on the date of the most recent acquisition
by such person or persons) ownership of stock of the Company
possessing thirty percent (30%) or more of the total voting
power of the stock of the Company;
(c) the date that any one person, or more than one person acting
as a group, acquires (or has acquired during the twelve (12)
month period ending on the date of the most recent acquisition
by such person or persons) assets from the Company that have a
total gross fair market value equal to or more than forty
percent (40%) of the total gross fair market value of all of the
assets of the Company immediately prior to such acquisition or
acquisitions; or
(d) the date that a majority of members of the Board is replaced
during any twelve (12) month period by directors whose appointment
or election is not endorsed by a majority of the members of the
Board prior to the date of the appointment or election.
2.06 Code: The Internal Revenue Code of 1986, as amended.
2.07 Committee: The Compensation Committee of the Board.
2.08 Company: Diamond Hill Investment Group, Inc., and its successors.
2.09 Deferral Election Form: The form each Eligible Employee and
Participant, as the case may be, must complete to defer Incentive
Compensation under this Plan.
2.10 Disability: A Participant shall be considered disabled if:
(a) the Participant is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or
can be expected to last for a continuous period of not less than
twelve (12) months; or
(b) the Participant is, by reason of any medically determinable
physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not
less than twelve (12) months, receiving income replacement benefits
for a period of not less than three (3) months under an accident and
health plan covering employees of the Participant's employer; or
(c) the Participant is determined to be totally disabled by the Social
Security Administration or Railroad Retirement Board.
2.11 Effective Date: May 1, 2013.
2.12 Eligible Employee: Each person employed by the Company or any of its
Affiliates who is not a portfolio manager or research analyst.
2.13 ERISA: The Employee Retirement Income Security Act of 1974, as amended.
2.14 Incentive Compensation: The gross amount that is earned by a
Participant under any bonus plan maintained by the Company or any of
its Affiliates. For the avoidance of doubt, Incentive Compensation
shall not include base salary.
2.15 Participant: An Eligible Employee who becomes a participant in this Plan
as described in Article 3.00.
2.16 Plan: The Diamond Hill Deferred Compensation Plan, as amended from
time to time.
2.17 Plan Administrator: The delegee(s) appointed by the Committee to
administer the Plan pursuant to Section 10.01(d).
2.18 Plan Benefit: The aggregate amount of a Participant's Accounts as of the
applicable Valuation Date.
2.19 Plan Year: Each calendar year during which this Plan is in effect.
2.20 Termination: A "separation from service" within the meaning of Code 409A
and Treasury Regulation 1.409A-1(h).
2.21 Unforeseeable Emergency: A severe financial hardship to a Participant
within the meaning of Code 409A resulting from: (a) an illness or
accident of the Participant or the Participant's spouse, Beneficiary
or dependent (as defined in Code 152, without regard to Code
152(b)(1), (b)(2) and (d)(1)(B)); (b) loss of the Participant's
property due to casualty; or (c) other similar or extraordinary and
unforeseeable circumstances arising as a result of events beyond the
control of the Participant.
2.22 Valuation Date: The last day of each calendar month or any other
date or dates fixed by the Plan Administrator for the valuation and
adjustment of an Account.
3.00 Participation
3.01 Commencement of Participation. Subject to Section 3.02 of this Plan, each
Eligible Employee shall become a Participant on the date on which the
Eligible Employee submits an effective Deferral Election Form.
3.02 Loss of Eligible Employee Status. A Participant who is no longer an
Eligible Employee shall not be permitted to submit a Deferral Election
Form. All deferrals then in effect for such Participant shall cease as
of the earlier to occur of (a) the Participant's Termination or
(b) the end of the Plan Year in which the Participant is determined to
no longer be an Eligible Employee. Amounts credited to the Accounts of
a Participant who is no longer an Eligible Employee shall continue
to be administered in accordance with the terms and conditions of this
Plan and shall be distributed as provided in Article 7.00.
4.00 Deferrals and Contributions
4.01 Deferrals.
(a) Deferral Elections - In General.
(i) A Participant may elect to defer Incentive Compensation
under this Plan by submitting a signed Deferral Election Form to
the Plan Administrator within the deadlines imposed by this Plan
and set forth in Section 4.01(b). Any deferral election made by
a Participant for a Plan Year shall be irrevocable after the
expiration of the applicable deadline described in
Section 4.01(b); provided, however, that a cessation of
deferrals shall be allowed if the Participant suffers an
Unforeseeable Emergency, becomes Disabled, or to the
extent permitted by Treasury Regulation 1.409A-3(j)(4)(viii).
(ii) Amounts deferred under this Plan shall not be made available
to the Participant, except as provided in Article 7.00, and
shall reduce the Incentive Compensation payable to the
Participant in the year of the deferral in accordance with the
provisions of the applicable Deferral Election Form; provided,
however, that all such amounts shall be subject to the rights of
the general creditors of the Company and its Affiliates as
provided in Article 12.00 of this Plan.
(b) Timing of Deferral Elections. A deferral election under this Plan
shall be effective only if it is made in a timely manner as follows:
(i) In General. Except as permitted under subsections (ii) and
(iii) of this Section 4.01(b), a Deferral Election Form must
be submitted to the Plan Administrator by the last day of the
Plan Year preceding the Plan Year in which services giving rise
to the Incentive Compensation to be deferred are to be performed.
(ii) First Year of Eligibility. Notwithstanding the foregoing, if
and to the extent permitted by the Plan Administrator, during
the first Plan Year in which an Eligible Employee is eligible
to participate in this Plan, the Eligible Employee may submit
a Deferral Election Form to the Plan Administrator no later
than thirty (30) days after the date on which the Eligible
Employee becomes so eligible, with respect to Incentive
Compensation to be earned for services performed after such
election is made; provided, however, that this subsection (ii)
shall not apply if, at such time, the Eligible Employee also
is eligible to participate in any other arrangement that,
along with this Plan, is treated as a single nonqualified
deferred compensation plan under Code 409A and the Treasury
Regulations promulgated thereunder.
(iii) Performance-Based Compensation. Notwithstanding the foregoing
and to the extent permitted by the Plan Administrator, a
Deferral Election Form with respect to any performance-based
compensation (within the meaning of Code 409A) may be
submitted by an Eligible Employee or a Participant by the
date that is not later than six months before the end of the
performance period on which the performance-based
compensation is based; provided that in no event
may an election to defer be made after such performance-based
compensation has become readily ascertainable.
(c) Additional Requirements for Deferral Elections. Deferrals made
pursuant to a Deferral Election Form must be made in whole
percentages of up to 50% of the stock portion of the
Participant's Incentive Compensation for a Plan Year and up to
100% of the cash portion of the Participant's Incentive
Compensation for a Plan Year and subject to such other
limitations as the Plan Administrator may impose from time to
time in its sole discretion.
4.02 Crediting of Contributions. Deferrals of Incentive Compensation,
if any, shall be credited to a Participant's Account for the
applicable Plan Year as soon as administratively practicable
following distribution of the Incentive Compensation.
5.00 Vesting
5.01 Deferrals of Incentive Compensation. Subject to Section 5.02, a
Participant shall be one hundred percent (100%) vested in the portion of
his or her Plan Benefit.
5.02 Clawback. Notwithstanding anything in this Plan to the contrary, a
Participant's Plan Benefit shall be subject to terms and conditions of
the Company's Compensation Recoupment and Restitution Policy.
6.00 Accounts
6.01 Establishment of Accounts. The Plan Administrator shall establish and
maintain an Account for each Participant for each Plan Year a Deferral
Election Form is submitted by the Participant. The applicable Account
of the Participant shall be credited with, to the extent applicable,
any deferrals of Incentive Compensation for the Plan Year, and the
Participant's allocable share of any deemed earnings or losses on the
foregoing. Each of the Participant's Accounts shall be reduced by
any distributions made from such Accounts plus, subject to
Article 8.00 of this Plan and to the extent permitted by applicable
law, any federal, state and local tax withholding as may be
required by law.
6.02 Establishment of Subaccounts. Within each Participant's Account,
separate subaccounts shall be maintained to the extent necessary for
the administration of this Plan.
6.03 Earnings or Losses on Accounts.
(a) The Company shall invest the Accounts on behalf of the Participant or
credit the Accounts with earnings or interest as though the Accounts
were invested in such investments and under such criteria as the
Plan Administrator may determine in its sole discretion. The
Company may also permit the Participant to direct the investment or
deemed investment of the Participant's Accounts in such investments
as the Company may make available for this purpose from time to time
or as the Participant may select. The Company assumes no
responsibility or liability with respect to any loss or expense that
may arise, result or be incurred from any investment or deemed
investment of the Accounts. Any costs or expenses incurred by the
Company in the investment of the Accounts shall be debited against
the Accounts. The Accounts shall be credited with earnings or
debited for losses, as the case may be, based on its investment or
deemed investment pursuant to Section 6.03(b) of this Plan.
(b) As of each Valuation Date, each of the Participant's Accounts will
be credited with earnings and charged with losses equal to the
amount by which the Accounts would have been credited or charged
since the prior Valuation Date had the Participant's Accounts been
invested as described in Section 6.03(a) of this Plan.
(c) Notwithstanding the foregoing, Participants' Accounts shall merely
be bookkeeping entries on the books of the Company and its
Affiliates, as applicable, and no Participant or Beneficiary shall
obtain any property right or interest in any investment or any
other particular assets of the Company or any of its Affiliates.
7.00 Distribution of Participant Accounts
7.01 Distributions Upon Fifth Anniversary. Subject to Section 7.02 of
this Plan, a Participant's Account for each Plan Year will be
distributed in a lump sum payment within ninety (90) days
following the fifth anniversary of the date the Incentive
Compensation was deferred.
7.02 Distributions Upon Death, Disability or Change in Control.
(a) Death. Notwithstanding anything in this Plan to the contrary, if
a Participant dies before his or her Plan Benefit has been fully
distributed, the Plan Benefit will be distributed to the
Participant's Beneficiary in a lump sum within ninety
(90) days after the date of the Participant's death.
(b) Disability. Notwithstanding anything in this Plan to the contrary,
if a Participant becomes Disabled before his or her Plan Benefit
has been fully distributed, the Plan Benefit will be distributed
to the Participant in a lump sum within ninety (90) days after
the date of the Participant's Disability.
(c) Change in Control. Notwithstanding anything in this Plan to the
contrary, if a Change in Control occurs before a Participant's
Plan Benefit has been fully distributed, the Plan Benefit will
be distributed to the Participant in a lump sum within thirty
(30) days after the Change in Control.
7.03 Payments Upon Income Inclusion. The Company may accelerate the
time of a payment to a Participant to pay an amount the
Participant includes in income as a result of this Plan failing
to meet the requirements of Code 409A. Such payment shall
not exceed the amount required to be included in income as a
result of the failure to comply with Code 409A.
7.04 Full Discharge. Once the Participant's Plan Benefit has been
fully distributed, none of the Company, its Affiliates, the
Board, the Committee, the Plan Administrator, their delegates or
this Plan will have any further liability under this Plan to the
Participant or the Participant's Beneficiary.
8.00 Tax Withholding
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The Company or any Affiliate, as applicable, shall withhold from other amounts owed to a Participant or require the Participant to remit to the Company or the Affiliate, as applicable, an amount sufficient to satisfy federal, state and local tax withholding requirements with respect to any Plan Benefit or the vesting, payment or cancellation of any Plan Benefit.
9.00 Claims Procedure Any Participant or Beneficiary (a "claimant") who believes that he or she is entitled to an unpaid Plan Benefit may file a written notification of his or her claim with the Plan Administrator in accordance with the procedures established by the Plan Administrator. The claimant shall provide all information, verification, documents, or forms as may be required by the Plan Administrator to appropriately process such claim.
10.00 Administration
10.01 Administration.
(a) The Committee is expressly empowered to interpret this Plan,
determine all questions arising in the administration,
interpretation and application of this Plan; employ actuaries,
accountants, counsel and other persons the Committee deems
necessary in connection with the administration of this Plan,
request any information from the Company or any of its Affiliates
the Committee deems necessary to determine whether the Company or
any Affiliate would be considered insolvent or subject to a
proceeding in bankruptcy, and take all other
necessary and proper actions to fulfill its duties under this Plan.
(b) The Committee shall not be liable for any actions by it hereunder,
unless due to its own negligence, willful misconduct or lack of
good faith.
(c) The Committee (and any delegate under Section 10.01(d) of this Plan)
shall be indemnified and saved harmless by the Company from and
against all personal liability to which the Committee may be
subject by reason of any act done or omitted to be done in its
official capacity as administrator in good faith in the
administration of this Plan, including all expenses reasonably
incurred in its defense in the event the Company fails to provide
such defense upon the request of the Committee.
(d) In exercising its authority under this Plan, the Committee may
allocate all or any part of its responsibilities and powers to
any one or more of its members and may delegate all or any part
of its responsibilities and powers to any person or persons
selected by it. Any such allocation or delegation may be revoked
at any time.
10.02 Compensation and Expenses.
(a) The Committee and any delegate under Section 10.01(d) of this
Plan will serve without compensation for services to this Plan.
The Company and, if applicable, its Affiliates, will furnish the
Committee and any delegate under Section 10.01(d) of this Plan
with all clerical or other assistance necessary to perform his
or her duties.
(b) The Company and its Affiliates will pay all expenses of
administering this Plan.
10.03 Effect of Actions.
(a) All actions taken and all determinations made by the Committee
and the Plan Administrator in good faith will be final and
binding upon all Participants, Beneficiaries, the Company and
its Affiliates and any other person interested in this Plan.
To the extent the Plan Administrator has been granted
discretionary authority under this Plan, its prior exercise of
this authority will not obligate the Plan Administrator to
exercise its authority in a like fashion thereafter.
(b) This Plan will be interpreted by the Committee in accordance
with its terms and their intended meaning. The construction
and interpretation of the provisions of this Plan are vested
with the Committee, in its absolute discretion, including,
without limitation, the determination of benefits and
eligibility. All decisions, determinations and
interpretations will be final, conclusive and
binding upon all parties having an interest in this Plan.
11.00 Amendments and Termination
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The Company may, at any time, in its sole discretion, amend, modify, suspend or terminate this Plan in whole or in part, except that no such amendment, modification, suspension or termination shall have any retroactive effect to reduce any amounts allocated to a Participant's Accounts without the Participant's consent. In the event that this Plan is terminated, the distribution of the amounts credited to a Participant's Accounts shall not be accelerated but shall be paid at such time and in such manner as determined under the terms of this Plan immediately prior to termination as if this Plan had not been terminated; provided, however, that the Company, in its sole discretion, may distribute a Participant's Plan Benefit in accordance with Treasury Regulation 1.409A-3(j)(4)(ix).
12.00 Prohibition Against Funding This Plan is an unfunded, unsecured promise by the Company and its Affiliates to pay only those Plan Benefits that are accrued by Participants under the terms of this Plan. Neither the Company nor any of its Affiliates are required to segregate any assets into a fund established exclusively to pay Plan Benefits. The Participants and their Beneficiaries have only the rights of general unsecured creditors and do not have any interest in or right to any specific asset of the Company or any of its Affiliates. The Company or one of its Affiliates, as applicable, shall be designated the owner and beneficiary of any investment acquired in connection with obligations under this Plan.
13.00 Miscellaneous
13.01 No Contract. The adoption and maintenance of this Plan shall not be deemed to constitute a contract of employment or otherwise between the Company or any of its Affiliates and any employee or Participant or other person, or to be consideration for, or an inducement or condition of, any employment. Nothing contained herein shall be deemed to give any employee or Participant or other person the right to be retained in the service of the Company or any of its Affiliates or to interfere with the right of the Company or any of its Affiliates (which right is expressly reserved) to discharge, with or without Cause, any employee or Participant or other person at any time without any liability for any claim either against this Plan (except to the extent provided herein) or against the Company or any of its Affiliates.
13.02 No Alienation. The right of a Participant or any other
person to receive Plan Benefits may not be assigned, transferred,
pledged or encumbered except as provided in the Participant's
designation of a Beneficiary, by will or by applicable laws of
descent and distribution. Any attempt to assign, transfer, pledge
or encumber a Plan Benefit will be null and void and of no legal
effect. Any action taken (or attempted to be taken) contrary to
the provisions of this Section 13.02 will be null and void and of no
effect whatsoever; the Company, its Affiliates, the Committee and the
Plan Administrator may disregard such action (or attempted action) and
will not in any manner be bound by it; and they, and each of them,
will suffer no liability by doing so. If any Participant or other
person acts (or attempts to take any action) contrary to this
Section 13.02, the Company, its Affiliates, the Committee and the Plan
Administrator will be reimbursed and indemnified on demand out of the
interest of such Participant in this Plan for any loss, cost or
expense incurred as a result of disregarding or acting in disregard of
that action (or attempted action).
13.03 Governing Law. This Plan, and applicable forms associated with this Plan, will be governed by and construed in accordance with the laws of the United States and, to the extent applicable, the laws of the State of Ohio, excluding any conflicts of laws principles.
13.04 Headings. Headings and subheadings in this document are inserted for convenience of reference only. They constitute no part of this Plan.
13.05 Invalid Provision. If any provision of this Plan is held to be illegal or invalid for any reason, this Plan will be construed and enforced as if the offending provision had not been included in this Plan. However, that determination will not affect the legality or validity of the remaining parts of this Plan.
13.06 Coordination with Other Plans. A Participant's or his or her Beneficiary's rights to any Plan Benefits will be determined solely by reference to the terms of this Plan document and will be unaffected by any other document or agreement between the Participant or the Beneficiary and the Company or any of its Affiliates.
13.07 Code 409A. Although the Company makes no guarantee with respect to the treatment of payment or benefits under this Plan, this Plan is intended to comply with the requirements of Code 409A and the Treasury Regulations promulgated thereunder, and the Company will interpret, apply and administer this Plan in accordance with this intent. Notwithstanding the foregoing, none of the Company, its Affiliates, the Committee or the Plan Administrator shall have any liability to a Participant for failure to comply with the requirements of Code 409A. Notwithstanding any provision in this Plan to the contrary, any Plan Benefit payable to a Participant who is a "specified employee" (as defined in Code 409A) of the Company or any of its Affiliates upon the Participant's Termination shall not be (or begin to be) distributed until six months after the date on which the Participant Terminates (or, if earlier, the date on which the Participant dies).
IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its duly authorized officer, effective as of the Effective Date.
Diamond Hill Investment Group, Inc.
By: ___________________________________
Title: _________________________________
DIAMOND HILL
VARIABLE TERM DEFERRED COMPENSATION PLAN
1.00 Purpose As of the Effective Date, the Company adopts this Plan for the purpose of providing deferred compensation to a select group of management and highly compensated employees. This Plan is an unfunded arrangement and is intended to be exempt from the participation, vesting, funding and fiduciary requirements set forth in Title I of ERISA.
2.00 Definitions Whenever used in this Plan, the following terms have the meanings given to them in this Article 2.00, unless another meaning is expressly provided elsewhere in this Plan. Also, the form of any term will include all of its other forms.
2.01 Account: A bookkeeping account established for each Participant
under Section 6.01 of this Plan.
2.02 Affiliate: Any entity that, along with the Company, would be
considered a single employer under Code 414(b) and 414(c).
2.03 Beneficiary: The person or persons designated by a Participant
to receive any portion of such Participant's Plan Benefit that is
unpaid at the Participant's death. Such designation shall be
made on a form prescribed by the Plan Administrator and shall
be effective only when filed with the Plan Administrator. If a
Participant has not made an effective designation of a
Beneficiary or Beneficiaries, the Participant's Beneficiary will
be his or her surviving spouse or, if there is no surviving
spouse, the Participant's estate. The identity of a
Participant's Beneficiary will be based only on the information
included on the latest beneficiary designation form filed by
the Participant with the Plan Administrator and will not be
inferred from any other evidence.
2.04 Board: The Board of Directors of the Company.
2.05 Change in Control: Provided that such definition shall be
interpreted in a manner that is consistent with the definition
of a "change in control event" under Code 409A and Treasury
Regulation 1.409A-3(i)(5), a "Change in Control" of the Company
shall mean the first to occur of any of the following:
(a) the date that any person, or more than one person acting as a
group, acquires ownership of stock of the Company that, together
with stock already held by such person or group, constitutes
more than fifty percent (50%) of the total fair market
value or total voting power of the stock of the Company;
(b) the date that any one person, or more than one person acting
as a group, acquires (or has acquired during the twelve (12)
month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of
the Company possessing thirty percent (30%) or more of the
total voting power of the stock of the Company;
(c) the date that any one person, or more than one person acting
as a group, acquires (or has acquired during the twelve (12)
month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company
that have a total gross fair market value equal to or more
than forty percent (40%) of the total gross fair market value
of all of the assets of the Company immediately prior to
such acquisition or acquisitions; or
(d) the date that a majority of members of the Board is replaced
during any twelve (12) month period by directors whose
appointment or election is not endorsed by a majority of the
members of the Board prior to the date of the appointment or
election.
2.06 Code: The Internal Revenue Code of 1986, as amended.
2.07 Committee: The Compensation Committee of the Board.
2.08 Company: Diamond Hill Investment Group, Inc., and its successors.
2.09 Deferral Election Form: The form each Eligible Employee and
Participant, as the case may be, must complete to defer Incentive
Compensation under this Plan and to designate the time and form
of distribution of his or her Plan Benefit.
2.10 Disability: A Participant shall be considered disabled if:
(a) the Participant is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or
can be expected to last for a continuous period of not less than
twelve (12) months; or
(b) the Participant is, by reason of any medically determinable
physical or mental impairment which can be expected to result
in death or can be expected to last for a continuous period of
not less than twelve (12) months, receiving income replacement
benefits for a period of not less than three (3) months under
an accident and health plan covering employees of the
Participant's employer; or
(c) the Participant is determined to be totally disabled by the
Social Security Administration or Railroad Retirement Board.
2.11 Distribution Election Change Form: The form each Eligible
Employee and Participant, as the case may be, may complete to
change a prior designation as to the time or form of
distribution of his or her Plan Benefit.
2.12 Effective Date: May 1, 2013.
2.13 Eligible Employee: Each person employed by the Company or any
of its Affiliates as a portfolio manager or research analyst
who is a highly compensated employee or a member of a select
group of management (both within the meaning of Title I of
ERISA) of the Company or any of its Affiliates, as
determined by the Committee in its sole discretion.
2.14 ERISA: The Employee Retirement Income Security Act of 1974,
as amended.
2.15 Incentive Compensation: The gross amount that is earned by a
Participant under any bonus plan maintained by the Company or
any of its Affiliates. For the avoidance of doubt, Incentive
Compensation shall not include base salary.
2.16 Participant: An Eligible Employee who becomes a participant
in this Plan as described in Article 3.00.
2.17 Plan: The Diamond Hill Deferred Compensation Plan, as amended
from time to time.
2.18 Plan Administrator: The delegee(s) appointed by the Committee
to administer the Plan pursuant to Section 10.01(d).
2.19 Plan Benefit: The aggregate amount of a Participant's Accounts
as of the applicable Valuation Date.
2.20 Plan Year: Each calendar year during which this Plan is in effect.
2.21 Termination: A "separation from service" within the meaning of
Code 409A and Treasury Regulation 1.409A-1(h).
2.22 Unforeseeable Emergency: A severe financial hardship to a
Participant within the meaning of Code 409A resulting from: (a) an
illness or accident of the Participant or the Participant's spouse,
Beneficiary or dependent (as defined in Code 152, without regard to
Code 152(b)(1), (b)(2) and (d)(1)(B)); (b) loss of the Participant's
property due to casualty; or (c) other similar or extraordinary and
unforeseeable circumstances arising as a result of events beyond the
control of the Participant.
2.23 Valuation Date: The last day of each calendar month or any other
date or dates fixed by the Plan Administrator for the valuation and
adjustment of an Account.
3.00 Participation
3.01 Commencement of Participation. Subject to Section 3.02 of this
Plan, each Eligible Employee shall become a Participant on the date
on which the Eligible Employee submits an effective Deferral Election
Form.
3.02 Loss of Eligible Employee Status. A Participant who is no longer
an Eligible Employee shall not be permitted to submit a Deferral
Election Form. All deferrals then in effect for such Participant
shall cease as of the earlier to occur of (a) the Participant's
Termination or (b) the end of the Plan Year in which the Participant
is determined to no longer be an Eligible Employee. Amounts credited
to the Accounts of a Participant who is no longer an Eligible
Employee shall continue to be administered in accordance with the
terms and conditions of this Plan and shall be distributed as provided
in Article 7.00.
4.00 Deferrals and Contributions
4.01 Deferrals.
(a) Deferral Elections - In General.
(i) A Participant may elect to defer Incentive Compensation under
this Plan by submitting a signed Deferral Election Form to the
Plan Administrator within the deadlines imposed by this Plan
and set forth in Section 4.01(b). Any deferral election made
by a Participant for a Plan Year shall be irrevocable after
the expiration of the applicable deadline described in
Section 4.01(b); provided, however, that a cessation of
deferrals shall be allowed if the Participant suffers an
Unforeseeable Emergency, becomes Disabled, or to the extent
permitted by Treasury Regulation 1.409A-3(j)(4)(viii).
(ii) Amounts deferred under this Plan shall not be made available
to the Participant, except as provided in Article 7.00, and
shall reduce the Incentive Compensation payable to the
Participant in the year of the deferral in accordance with the
provisions of the applicable Deferral Election Form; provided,
however, that all such amounts shall be subject to the rights
of the general creditors of the Company and its Affiliates
as provided in Article 12.00 of this Plan.
(b) Timing of Deferral Elections. A deferral election under this Plan
shall be effective only if it is made in a timely manner as follows:
(i) In General. Except as permitted under subsections (ii) and
(iii) of this Section 4.01(b), a Deferral Election Form must
be submitted to the Plan Administrator by the last day of the
Plan Year preceding the Plan Year in which services giving
rise to the Incentive Compensation to be deferred
are to be performed.
(ii) First Year of Eligibility. Notwithstanding the foregoing, if
and to the extent permitted by the Plan Administrator, during
the first Plan Year in which an Eligible Employee is eligible
to participate in this Plan, the Eligible Employee may submit
a Deferral Election Form to the Plan Administrator no later
than thirty (30) days after the date on which the Eligible
Employee becomes so eligible, with respect to Incentive
Compensation to be earned for services performed after such
election is made; provided, however, that this subsection (ii)
shall not apply if, at such time, the Eligible Employee also
is eligible to participate in any other arrangement that,
along with this Plan, is treated as a single nonqualified
deferred compensation plan under Code 409A and the
Treasury Regulations promulgated thereunder.
(iii) Performance-Based Compensation. Notwithstanding the foregoing
and to the extent permitted by the Plan Administrator, a
Deferral Election Form with respect to any performance-based
compensation (within the meaning of Code 409A) may be
submitted by an Eligible Employee or a Participant by the
date that is not later than six months before the end of
the performance period on which the performance-based
compensation is based; provided that in no event may an
election to defer be made after such performance-based
compensation has become readily ascertainable.
(c) Additional Requirements for Deferral Elections. Deferrals made
pursuant to a Deferral Election Form must be made in whole
percentages of up to 50% of the stock portion of the
Participant's Incentive Compensation for a Plan Year and up to 100%
of the cash portion of the Participant's Incentive Compensation for
a Plan Year and subject to such other limitations as the Plan
Administrator may impose from time to time in its sole discretion.
4.02 Crediting of Contributions. Deferrals of Incentive Compensation,
if any, shall be credited to a Participant's Account for the
applicable Plan Year as soon as administratively practicable
following distribution of the Incentive Compensation.
5.00 Vesting
5.01 Deferrals of Incentive Compensation. Subject to Section 5.02, a
Participant shall be one hundred percent (100%) vested in the
portion of his or her Accounts attributable to deferrals of
Incentive Compensation under Section 4.01 of this Plan and any
deemed earnings or losses on the investment of such deferrals.
5.02 Clawback. Notwithstanding anything in this Plan to the contrary,
a Participant's Plan Benefit shall be subject to terms and
conditions of the Company's Compensation Recoupment and
Restitution Policy.
6.00 Accounts
6.01 Establishment of Accounts. The Plan Administrator shall
establish and maintain an Account for each Participant for each
Plan Year a Deferral Election Form is submitted by the Participant.
The applicable Account of the Participant shall be credited with,
to the extent applicable, any deferrals of Incentive Compensation
for the Plan Year, and the Participant's allocable share of any
deemed earnings or losses on the foregoing. Each of the
Participant's Accounts shall be reduced by any distributions made
from such Accounts plus, subject to Article 8.00 of this Plan and
to the extent permitted by applicable law, any federal, state and
local tax withholding as may be required by law.
6.02 Establishment of Subaccounts. Within each Participant's Account,
separate subaccounts shall be maintained to the extent necessary
for the administration of this Plan. For example, it may be
necessary to maintain separate subaccounts where the Participant
has specified different Deferral Dates, methods of payment
or investment directions.
6.03 Earnings or Losses on Accounts.
(a) The Company shall invest the Accounts on behalf of the Participant
or credit the Accounts with earnings or interest as though the
Accounts were invested in such investments and under such criteria
as the Plan Administrator may determine in its sole discretion.
The Company may also permit the Participant to direct the investment
or deemed investment of the Participant's Accounts in such
investments as the Company may make available for this purpose
from time to time or as the Participant may select. The Company
assumes no responsibility or liability with respect to any loss or
expense that may arise, result or be incurred from any investment
or deemed investment of the Accounts. Any costs or expenses
incurred by the Company in the investment of the Accounts shall be
debited against the Accounts. The Accounts shall be credited with
earnings or debited for losses, as the case may be, based on its
investment or deemed investment pursuant to Section 6.03(b) of
this Plan.
(b) As of each Valuation Date, each of the Participant's Accounts
will be credited with earnings and charged with losses equal to the
amount by which the Accounts would have been credited or charged
since the prior Valuation Date had the Participant's Accounts been
invested as described in Section 6.03(a) of this Plan.
(c) Notwithstanding the foregoing, Participants' Accounts shall merely
be bookkeeping entries on the books of the Company and its
Affiliates, as applicable, and no Participant or Beneficiary
shall obtain any property right or interest in any investment or
any other particular assets of the Company or any of its Affiliates.
7.00 Distribution of Plan Benefits
7.01 Distributions Upon Termination (Other than Death) or at a
Specified Time.
(a) Subject to Section 7.05 of this Plan, a Participant's Accounts will
be distributed in accordance with the applicable Deferral Election
Form. A Participant may elect, at the time he submits a Deferral
Election Form as specified in Section 4.01(b), to have distributions
of the Incentive Compensation deferred for that Plan Year, as
adjusted pursuant to Section 6.03, made: (i) in a single lump sum
payment within ninety (90) days following either: (A) the
Participant's Termination; or (B) the earlier of (1) a date
specified by the Participant on a valid Deferral Election Form in
accordance with Section 4.01(b), or (2) the Participant's
Termination; or (ii) in up to five (5) substantially equal annual
installments beginning on the January 1 following either: (A) the
Participant's Termination and on each January 1 thereafter; or
(B) the earlier of (1) a date specified by the Participant on a
valid Deferral Election Form in accordance with Section
4.01(b) and every January 1 thereafter, or (2) the Participant's
Termination and on each January 1 thereafter. Notwithstanding
the foregoing, subject to Section 7.02 of the Plan, no
distribution shall occur until at least the fifth anniversary of
the date the Incentive Compensation was deferred unless in the
event of death, Disability or Change in Control.
(b) A Participant may elect to change the time or form of
distribution of the Participant's Plan Benefit (based on the
alternatives described in Section 7.01(a) of this Plan) by
submitting a Distribution Election Change Form to the Plan
Administrator; provided, however, that: (i) such change may not
take effect until at least twelve (12) months after the date on
which such election is made; (ii) the payment with respect to
which such change is made must be deferred (other than a distribution
upon death) for a period of not less than five (5) years from the
date such payment would otherwise have been paid (or in the case of
installment payments treated as a single payment, from the date
the first amount was scheduled to be paid); and (iii) such change
must be made not less than twelve (12) months before the date the
payment is scheduled to be paid (or in the case of installment
payments treated as a single payment, from the date the first
amount was scheduled to be paid).
7.02 Distributions Upon Death, Disability or Change in Control.
(a) Death. Notwithstanding anything in this Plan to the contrary,
if a Participant dies before his or her Plan Benefit has begun to be
distributed or has been fully distributed, the Plan Benefit will
be distributed to the Participant's Beneficiary in a lump sum
within ninety (90) days after the date of the Participant's death.
If a Participant dies after the Participant's Termination and after
his or her Plan Benefit has been fully distributed, no additional
benefit will be due to such Participant or his or her Beneficiary
under this Plan.
(b) Disability. Notwithstanding anything in this Plan to the contrary,
if a Participant becomes Disabled before his or her Plan Benefit
has begun to be distributed or has been fully distributed, the
Plan Benefit will be distributed to the Participant in a lump sum
within ninety (90) days after the date of the Participant's
Disability.
(c) Change in Control. Notwithstanding anything in this Plan to the
contrary, if a Change in Control occurs before a Participant's Plan
Benefit has begun to be distributed or has been fully distributed,
the Plan Benefit will be distributed to the Participant in a lump
sum within thirty (30) days after the Change in Control.
7.03 Unforeseeable Emergency. A Participant may request a distribution
of his or her Plan Benefit upon the occurrence of an Unforeseeable
Emergency. As a condition of receiving a distribution under this
Section 7.03, the Participant must file a written application with
the Plan Administrator specifying the nature of the Unforeseeable
Emergency, the amount needed to address the Unforeseeable
Emergency and supplying any other information that the Plan
Administrator, in its discretion, may need to ensure the conditions
specified in this Section 7.03 are satisfied. The Plan
Administrator shall, in its sole discretion, determine whether an
Unforeseeable Emergency exists. If the Plan Administrator determines
that an Unforeseeable Emergency exists, the Company or an Affiliate,
as applicable, shall distribute an amount to the Participant that
shall not be greater than the amount reasonably necessary, in the
Plan Administrator's determination, to satisfy the emergency need
(which may include the amount necessary to pay any federal, state,
local or foreign income taxes or penalties reasonably anticipated
to result from the distribution) or, if less, the value of the
Participant's Plan Benefit as of the Valuation Date immediately
preceding the distribution date. A distribution on account of an
Unforeseeable Emergency may not be made to the extent that such
emergency is or may be relieved through reimbursement or
compensation from insurance or otherwise, or by liquidation of the
Participant's assets, to the extent that the liquidation of such
assets would not cause a severe financial hardship.
7.04 Limited Cash-Out. Notwithstanding any provision in the Plan to
the contrary, the Plan Administrator, in its sole discretion, may
require a lump sum distribution of a Participant's Plan Benefit
if: (a) the distribution results in the termination and
liquidation of the entirety of the Participant's interest under
this Plan and all agreements, methods, programs or other
arrangements with respect to which deferrals of compensation are
treated as having been deferred under a single nonqualified
deferred compensation plan under Code 409A; and (b) the
aggregate distribution under the arrangements is not greater
than the applicable dollar amount under Code 402(g)(1)(B),
as in effect in the year of distribution.
7.05 Distributions to Specified Employees. Notwithstanding any provision
in this Plan to the contrary, any Plan Benefit payable to a
Participant who is a "specified employee" (as defined in Code 409A)
of the Company or any of its Affiliates upon the Participant's
Termination shall not be (or begin to be) distributed until six
months after the date on which the Participant Terminates (or, if
earlier, the date on which the Participant dies). The first payment
to be made shall include the cumulative amount (if any) of any
amounts that could not be paid during such postponement period.
7.06 Payments Upon Income Inclusion. The Company may accelerate the
time or schedule of a payment to a Participant to pay an amount
the Participant includes in income as a result of this Plan
failing to meet the requirements of Code 409A. Such payment shall
not exceed the amount required to be included in income as a result
of the failure to comply with Code 409A.
7.07 Full Discharge. Once the Participant's Plan Benefit has been
fully distributed, none of the Company, its Affiliates, the Board,
the Committee, the Plan Administrator, their delegates or this Plan
will have any further liability under this Plan to the Participant
or the Participant's Beneficiary.
8.00 Tax Withholding
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The Company or any Affiliate, as applicable, shall withhold from other amounts owed to a Participant or require the Participant to remit to the Company or the Affiliate, as applicable, an amount sufficient to satisfy federal, state and local tax withholding requirements with respect to any Plan Benefit or the vesting, payment or cancellation of any Plan Benefit.
9.00 Claims Procedure
9.01 Filing Claims. Any Participant or Beneficiary (a "claimant") who
believes that he or she is entitled to an unpaid Plan Benefit may
file a written notification of his or her claim with the Plan
Administrator.
9.02 Notification to Claimant. If the claim is wholly or partially
denied, the Plan Administrator will, within a reasonable period of
time, and within ninety (90) days of the receipt of such claim, or
if the claim is a claim on account of Disability, within
forty-five (45) days of the receipt of such claim, provide
the claimant with written notice of the denial setting forth in a
manner calculated to be understood by the claimant:
(a) The specific reason or reasons for which the claim was denied;
(b) Specific reference to pertinent Plan provisions, rules, procedures
or protocols upon which the Plan Administrator relied to deny the
claim;
(c) A description of any additional material or information that the
claimant may file to perfect the claim and an explanation of why
this material or information is necessary;
(d) An explanation of this Plan's claims review procedure and the
time limits applicable to such procedure and a statement of the
claimant's right to bring a civil action under ERISA 502(a)
following an adverse determination upon review; and
(e) In the case of an adverse determination of a claim on account
of Disability, if an internal rule, guideline, protocol, or other
similar criterion was relied upon, either a copy of the specific
rule, guideline, protocol, or other similar criterion, or a
statement that such a rule, guideline, protocol, or other similar
criterion was relied upon in making the adverse determination
and that a copy of such rule, guideline, protocol, or other
criterion will be provided free of charge to the claimant upon
request.
If special circumstances require the extension of the time period
described above, the claimant will be notified before the end of
the initial period of the circumstances requiring the extension
and the date by which the Plan Administrator expects to reach a
decision. If the claim is on account of Disability, an extension
notice must explain (i) the circumstances requiring delay;
(ii) the standards for entitlement for a benefit;
(iii) unresolved issues; (iv) information needed to resolve those
issues; and (v) the date the Plan Administrator expects to decide
the claim. Any extension for deciding a claim will not be for
more than an additional ninety (90) day period, or if the claim
is on account of Disability, for not more than two (2) additional
thirty (30) day periods.
9.03 Review Procedure. If a claim has been wholly or partially denied,
the affected claimant, or his or her authorized representative may:
(a) Request that the Plan Administrator reconsider its initial denial
by filing a written appeal within sixty (60) days after receiving
written notice that all or part of the initial claim was denied
(one hundred eighty (180) days in the case of a denial of a claim
on account of Disability);
(b) Review pertinent documents and other material upon which the
Plan Administrator relied when denying the initial claim; and
(c) Submit a written description of the reasons for which the claimant
disagrees with the Plan Administrator's initial adverse decision.
An appeal of an initial denial of benefits and all supporting
material must be made in writing within the time periods described
above and directed to the Plan Administrator. The Plan
Administrator is solely responsible for reviewing all benefit
claims and appeals and taking all appropriate steps to implement
its decision.
The Plan Administrator's decision on review will be sent to the
claimant in writing and will include:
(i) Specific reason or reasons for the decision;
(ii) Specific references to pertinent Plan provisions upon
which the decision is based;
(iii) The claimant's ability to review and receive copies of
all documents relating to the claimant's claim for
benefits, free of charge;
(iv) An explanation of any voluntary review procedures
describing the steps to be taken by a claimant who wishes
to submit the claimant's claims for review and the time
limits applicable to such procedures;
(v) A statement of the claimant's right to bring a civil
action under ERISA Section 502(a); and
(vi) In the case of an adverse determination of a claim on
account of Disability, if an internal rule, guideline,
protocol, or other similar criterion was relied upon,
either a copy of the specific rule, guideline, protocol,
or other similar criterion, or a statement that such a
rule, guideline, protocol, or other similar criterion
was relied upon in making the adverse determination
and that a copy of such rule, guideline, protocol, or
other criterion will be provided free of charge to the
claimant upon request.
The Plan Administrator will consider all information submitted
by the claimant, regardless of whether the information was part
of the original claim.
The Plan Administrator's decision on review will be made not
later than sixty (60) days (forty-five (45) days in the case
of a claim on account of Disability) after the Plan
Administrator's receipt of the request for review, unless
special circumstances require an extension of time for processing,
in which case a decision will be rendered as soon as possible,
but not later than one hundred twenty (120) days (ninety (90) days
in the case of a claim on account of Disability) after receipt of
the request for review. This notice to the claimant will
indicate the special circumstances requiring the extension and
the date by which the Plan Administrator expects to render a
decision and will be provided to the claimant prior to the
expiration of the initial forty-five (45) day or sixty (60)
day period.
Notwithstanding the foregoing, in the case of a claim on account
of Disability: (A) the review of the denied claim shall be
conducted by the Plan Administrator's designee or a named
fiduciary who is neither the individual who made the benefit
determination nor a subordinate of such person; and (B) no
deference shall be given to the initial benefit determination.
For issues involving medical judgment, the Plan
Administrator's designee or the named fiduciary, as applicable,
must consult with an independent health care professional who may
not be the health care professional who decided the initial claim.
To the extent permitted by law, the decision of the Plan
Administrator (if no review is properly requested) or the
decision of the review official on review, as the case may be,
will be final and binding on all parties. No legal action for
benefits under this Plan will be brought unless and until the
claimant has exhausted his or her remedies under this Article 9.00.
10.00 Administration
10.01 Administration.
(a) The Committee is expressly empowered to interpret this Plan,
determine all questions arising in the administration,
interpretation and application of this Plan; employ actuaries,
accountants, counsel and other persons the Committee deems
necessary in connection with the administration of this Plan,
request any information from the Company or any of its Affiliates
the Committee deems necessary to determine whether the Company
or any Affiliate would be considered insolvent or subject to a
proceeding in bankruptcy, and take all other necessary and
proper actions to fulfill its duties under this Plan.
(b) The Committee shall not be liable for any actions by it
hereunder, unless due to its own negligence, willful
misconduct or lack of good faith.
(c) The Committee (and any delegate under Section 10.01(d) of
this Plan) shall be indemnified and saved harmless by the
Company from and against all personal liability to which the
Committee may be subject by reason of any act done or omitted to
be done in its official capacity as administrator in good faith in
the administration of this Plan, including all expenses reasonably
incurred in its defense in the event the Company fails to provide
such defense upon the request of the Committee.
(d) In exercising its authority under this Plan, the Committee may
allocate all or any part of its responsibilities and powers to
any one or more of its members and may delegate all or any part
of its responsibilities and powers to any person or persons
selected by it. Any such allocation or delegation may be revoked
at any time.
10.02 Compensation and Expenses.
(a) The Committee and any delegate under Section 10.01(d) of this
Plan will serve without compensation for services to this Plan.
The Company and, if applicable, its Affiliates, will furnish the
Committee and any delegate under Section 10.01(d) of this Plan
with all clerical or other assistance necessary to perform his
or her duties.
(b) The Company and its Affiliates will pay all expenses of
administering this Plan.
10.03 Effect of Actions.
(a) All actions taken and all determinations made by the Committee
and the Plan Administrator in good faith will be final and binding
upon all Participants, Beneficiaries, the Company and its
Affiliates and any other person interested in this Plan. To the
extent the Plan Administrator has been granted discretionary
authority under this Plan, its prior exercise of this authority
will not obligate the Plan Administrator to exercise its authority
in a like fashion thereafter.
(b) This Plan will be interpreted by the Committee in accordance
with its terms and their intended meaning. The construction
and interpretation of the provisions of this Plan are vested with
the Committee, in its absolute discretion, including, without
limitation, the determination of benefits and eligibility.
All decisions, determinations and interpretations will be final,
conclusive and binding upon all parties having an interest in
this Plan.
11.00 Amendments and Termination
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The Company may, at any time, in its sole discretion, amend, modify, suspend or terminate this Plan in whole or in part, except that no such amendment, modification, suspension or termination shall have any retroactive effect to reduce any amounts allocated to a Participant's Accounts without the Participant's consent. In the event that this Plan is terminated, the distribution of the amounts credited to a Participant's Accounts shall not be accelerated but shall be paid at such time and in such manner as determined under the terms of this Plan immediately prior to termination as if this Plan had not been terminated; provided, however, that the Company, in its sole discretion, may distribute a Participant's Plan Benefit in accordance with Treasury Regulation 1.409A-3(j)(4)(ix).
12.00 Prohibition Against Funding
This Plan is an unfunded, unsecured promise by the Company and its Affiliates to pay only those Plan Benefits that are accrued by Participants under the terms of this Plan. Neither the Company nor any of its Affiliates are required to segregate any assets into a fund established exclusively to pay Plan Benefits. This Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA. The Participants and their Beneficiaries have only the rights of general unsecured creditors and do not have any interest in or right to any specific asset of the Company or any of its Affiliates. The Company or one of its Affiliates, as applicable, shall be designated the owner and beneficiary of any investment acquired in connection with obligations under this Plan.
13.00 Miscellaneous
13.01 No Contract. The adoption and maintenance of this Plan shall not be
deemed to constitute a contract of employment or otherwise between
the Company or any of its Affiliates and any employee or Participant
or other person, or to be consideration for, or an inducement or
condition of, any employment. Nothing contained herein shall be
deemed to give any employee or Participant or other person the
right to be retained in the service of the Company or any of its
Affiliates or to interfere with the right of the Company or any of
its Affiliates (which right is expressly reserved) to discharge, with
or without Cause, any employee or Participant or other person at any
time without any liability for any claim either against this
Plan (except to the extent provided herein) or against the Company or
any of its Affiliates.
13.02 No Alienation. The right of a Participant or any other person to
receive Plan Benefits may not be assigned, transferred, pledged
or encumbered except as provided in the Participant's designation
of a Beneficiary, by will or by applicable laws of descent and
distribution. Any attempt to assign, transfer, pledge or encumber
a Plan Benefit will be null and void and of no legal effect.
Any action taken (or attempted to be taken) contrary to the provisions
of this Section 13.02 will be null and void and of no effect
whatsoever; the Company, its Affiliates, the Committee and the Plan
Administrator may disregard such action (or attempted action) and
will not in any manner be bound by it; and they, and each of them,
will suffer no liability by doing so. If any Participant or other
person acts (or attempts to take any action) contrary to this
Section 13.02, the Company, its Affiliates, the Committee and the
Plan Administrator will be reimbursed and indemnified on demand
out of the interest of such Participant in this Plan for any loss,
cost or expense incurred as a result of disregarding or acting in
disregard of that action (or attempted action).
13.03 Governing Law. This Plan, and applicable forms associated with
this Plan, will be governed by and construed in accordance with
the laws of the United States and, to the extent applicable, the
laws of the State of Ohio, excluding any conflicts of laws principles.
13.04 Headings. Headings and subheadings in this document are inserted for
convenience of reference only. They constitute no part of this Plan.
13.05 Invalid Provision. If any provision of this Plan is held to be
illegal or invalid for any reason, this Plan will be construed and
enforced as if the offending provision had not been included in this
Plan. However, that determination will not affect the legality or
validity of the remaining parts of this Plan.
13.06 Coordination with Other Plans. A Participant's or his or her
Beneficiary's rights to any Plan Benefits will be determined solely
by reference to the terms of this Plan document and will be
unaffected by any other document or agreement between the Participant
or the Beneficiary and the Company or any of its Affiliates.
13.07 Code 409A. Although the Company makes no guarantee with respect
to the treatment of payment or benefits under this Plan, this Plan
is intended to comply with the requirements of Code 409A and the
Treasury Regulations promulgated thereunder, and the Company will
interpret, apply and administer this Plan in accordance with this
intent. Notwithstanding the foregoing, none of the Company, its
Affiliates, the Committee, or the Plan Administrator shall have
any liability to a Participant for failure to comply with the
requirements of Code 409A.
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IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its duly authorized officer, effective as of the Effective Date.
Diamond Hill Investment Group, Inc.
By: ___________________________________
Title: _________________________________