Executive Restricted Stock Incentive Plan

EXHIBIT 10.5


THE E.W. BLANCH HOLDINGS, INC. EXECUTIVE RESTRICTED
STOCK INCENTIVE PLAN


Section 1. Purposes.


The E.W. Blanch Holdings, Inc. Executive Restricted Stock Incentive Plan (the "Plan") was established by the Board of Directors of E.W. Blanch Holdings, Inc. (the "Company"), effective as of February 18, 1997, subject to approval by the Shareholders of the Company. The purpose of the Plan is to provide incentivized, at-risk compensation for a select group of management or highly compensated employees of the Company or its Subsidiaries whom the Company believes can contribute materially to the continued growth, development and success of the Company.


Section 2. Definitions.


As used in this Plan, the following terms shall have the meanings indicated and other capitalized terms not defined below shall have the meanings as defined in the 1993 Stock Incentive Plan of E.W. Blanch Holdings, Inc.:


(a) "Base Compensation" shall mean the Participant's base salary payable by the Company or its Subsidiaries, determined on an annualized basis, without regard to any bonuses or incentive plan compensation, and prior to the Elective Deferral the Participant agrees to under the terms of this Plan.


(b) "Committee" shall mean the Personnel and Compensation Committee of the Company's Board of Directors.


(c) "Designated Beneficiary" shall mean a beneficiary designated by a Participant, in accordance with the terms and conditions of Section 15 of the Plan, to receive the Participant's Plan Account in the event of the Participant's death, or in the absence of an effective designation by the Participant, the Participant's surviving spouse, or if there is no servicing spouse, the Participant's estate.


(d) "Election to Defer Base Compensation" shall mean that written election form adopted from time-to-time by the Company's management or the Committee, which documents a Participant's annual and irrevocable election to participate in the Plan and to defer his or her Base Compensation in accordance with the terms and conditions of the Plan.


(e) "Elective Deferral" shall mean the portion of a Participant's Base Compensation that the Participant elects to forego in accordance with the terms and conditions of the Plan.


(f) "Participant" shall mean any managerial or highly compensated employee of the Company or its Subsidiaries who is eligible to participate in the Plan and has filed a written Election to Defer Base Compensation in accordance with the terms and conditions of this Plan.


(g) "Performance Period" shall mean the period during which the achievement of the Target Performance Goals selected by the Committee with respect to any award pursuant to the Plan is to be measured.


(h) "Plan Account" shall mean a general ledger account established for a Participant in accordance with the terms and conditions of Section 11 of the Plan.


(i) "Restricted Stock" shall mean "Restricted Stock" as defined in the 1993 Stock Incentive Plan of E.W. Blanch Holdings, Inc..


(j) "Securities Act" shall mean the Securities Act of 1933, as amended from time to time.


(k) "Subsidiaries" shall mean those corporations, more than 50% of whose outstanding securities the Company has the right, directly or indirectly, to vote for the elections of directors, and who are identified by the Committee to be covered by this Plan.


(l) "Target Performance Goal(s)" shall mean a performance goal established by the Committee, at any time ending on or before the 90th day of the applicable Performance Period, based on any or all of the following business criteria, which may apply to the individual in question, an identifiable business unit or the Company as a whole: stock price, market share, sales, earnings per share, return on equity or costs, return on invested capital or net assets employed, cumulative total return to shareholders, whether compared to preselected peer groups or not, consolidated pre-tax earnings, net revenues, net earnings, operating income, earnings before interest and taxes, and cash flow, for the applicable performance period, all as computed in accordance with generally accepted accounting principles as in effect from time to time and as applied by the Company in the preparation of its financial statements and subject to such other special rules and conditions as the Committee may establish at any time ending on or before the 90th day of the applicable Performance Period. The foregoing shall constitute the sole business criteria upon which the performance goals under this Plan shall be based.


Section 3. Eligibility and Participation.


Employees of the Corporation and its Subsidiaries shall be eligible to participate in the Plan if they hold an officer position of Senior Vice President or higher in the Corporation or its subsidiaries. For purposes of the Swire Blanch Insurance (Holdings) Limited and its Subsidiaries, eligible employees shall be those holding the position of Director or higher. An eligible employee may participate in the Plan for a specified Performance Period by timely filing with the Company an Election to Defer Base Compensation for that Performance Period.


Section 4. Plan Benefits.


Every Performance Period, in conjunction with filing the Election to Defer Base Compensation, each Participant will designate a percentage of his or her Base Compensation


that constitutes his or her Elective Deferral for that Performance Period. The Participant may elect to forego 5%, 10%, 15% or 20% of his or her Base Compensation, or such other percent as may be permitted by the Committee. The period of time in which the Participant actually foregoes the designated percent of his or her Base Compensation need not coincide exactly with the Performance Period.


In exchange, the Participant shall receive the right to an award of Restricted Stock, subject to the award, vesting and forfeitures provisions of this Plan. The amount of Restricted Stock awarded will depend on whether the Company achieves the Target Performance Goal(s) designated by the Committee for the Performance Period in issue. If the Company does achieve the designated Target Performance Goal(s), the Participant will be awarded Restricted Stock valued at two-times the amount of Base Compensation the Participant elected to forego that year, based on the Fair Market Value of the Company's stock as of the close of trading on April 1 of that Performance Period (to the next full share). If the Company does not achieve the designated Target Performance Goal, each Participant will be awarded Restricted Stock valued at 50% of the amount of Base Compensation the Participant elected to forego that Performance Period, based on the tradi ...