Exhibit 10.3

 

 

RLI CORP. EXECUTIVES

DEFERRED COMPENSATION PLAN

Restated as of January 1, 2020

 

 

 

 

 

 

 

 

 

 

 

Page

Article 1

INTRODUCTION

1

 

1.1

Establishment

1

 

1.2

Purpose

1

 

1.3

Definitions

1

 

1.4

“Top-Hat” Plan

3

 

 

 

 

Article 2

PARTICIPATION

4

 

2.1

Eligibility and Selection

4

 

2.2

Notification

4

 

2.3

Enrollment

4

 

2.4

Elective Deferrals

4

 

 

 

 

Article 3

ACCOUNTS

5

 

3.1

Accounts

5

 

3.2

Credits to Accounts

5

 

3.3

Elective Deferrals

5

 

3.4

Hypothetical Investment Funds

5

 

3.5

Charges to Accounts

6

 

 

 

 

Article 4

BENEFITS

6

 

4.1

Vesting

6

 

4.2

Payment of Plan Benefits – Amounts Deferred Prior to January 1, 2020 – General
Rule

6

 

4.3

Payment of Plan Benefits – Amounts Deferred On or After January 1, 2020 –
General Rule

6

 

4.4

Changing Payment Elections

7

 

4.5

Special Rules

7

 

4.6

Medium of Payments

8

 

4.7

Delay in Distributions

8

 

4.8

Acceleration of Distributions

8

 

4.9

When a Payment is Deemed to be Made

9

 

 

 

 

Article 5

DEATH BENEFITS

9

 

5.1

Death Benefits

9

 

5.2

Designation of Beneficiary

10

 

 

 

 

Article 6

CLAIMS AND REVIEW PROCEDURES

11

 

6.1

Application for Benefits

11

 

6.2

Claims and Review Procedures

11

 

6.3

Claims Rules

12

 

6.4

Deadline to File Claim

13

 

6.5

Exhaustion of Administrative Remedies

13

 

6.6

Arbitration

13

 

6.7

Deadline to File an Arbitration Action

13

 

6.8

Knowledge of Fact by Participant Imputed to Beneficiary

13

 

6.9

Deferral of Payment

13

 

 

 

 

Article 7

ADMINISTRATION

14

 

7.1

Administrator

14

 

7.2

Benefits Not Transferable

14

 

7.3

Benefits Not Secured

14

 

7.4

RLI’s Obligations

14

 

7.5

Withholding Taxes

15

 

7.6

Service of Process

15

 

7.7

Limitation on Liability

15

 

 

 

 

i

Article 8

AMENDMENT AND TERMINATION

15

 

8.1

Amendment

15

 

8.2

Termination

15

 

 

 

 

Article 9

MISCELLANEOUS

15

 

9.1

Effect on Other Plans

15

 

9.2

Effect on Employment

15

 

9.3

Disqualification

15

 

9.4

Rules of Document Construction

15

 

9.5

References to Laws

16

 

9.6

Choice of Law

16

 

9.7

Binding Effect

16

 

 

 

 

 

 

 

 

 

 

ii

RLI CORP. EXECUTIVES

DEFERRED COMPENSATION PLAN

 

ARTICLE 1

 

INTRODUCTION

 

1.1Establishment.  RLI Corp. established the RLI Corp. Executives Deferred
Compensation Plan effective January 1, 2005. Prior to that date, RLI provided
similar deferred compensation opportunities to a select group of executives
under certain Prior Agreements. All obligations under the Prior Agreements
(including any predecessor arrangements) will be satisfied under the Prior
Agreements, rather than under this Plan. On April 10, 2007, RLI restated the
Plan, effective January 1, 2009, to comply with the requirements of the final
regulations issued under Section 409A of the Code (“Section 409A”).  RLI
thereafter amended the Plan effective May 4, 2017 to make clear how partial (or
fractional) shares are paid in a single or final payment.  On [●], 2019, RLI
further restated the Plan to expand the types of investment and distribution
alternatives available to Participants.

 

This restatement applies to amounts deferred under the Plan on or after January
1, 2020 (the “Restatement Date”), and, to the extent permitted under Section
409A, to the payment of all amounts deferred under the Plan (whether such
amounts were deferred before, on, or after the Restatement Date) that have not
yet been distributed as of the Restatement Date.

 

The obligation of RLI to make payments under the Plan constitutes an unsecured
(but legally enforceable) promise of RLI to make such payments and no person,
including any Participant or Beneficiary, shall have any lien, prior claim or
other security interest in any property of RLI as a result of the Plan.

 

1.2Purpose.    The purpose of the Plan is to attract and retain qualified
executives and to provide them with an opportunity to save on a pre-tax basis
and accumulate tax-deferred income to achieve their financial goals.

 

1.3Definitions.    When the following terms are used herein with initial capital
letters, they shall have the following meanings:

 

1.3.1.Account - the separate recordkeeping account (unfunded and unsecured)
maintained for each Participant in connection with the Participant’s
participation in the Plan, which shall consist of separate subaccounts relating
to the Deferral Eligible Amounts deferred by such Participant in each Year.

 

1.3.2.Affiliate - a business entity which is under a “common control” with RLI
or which is a member of an “affiliated service group” that includes RLI, as
those terms are defined in Code § 414(b), (c) and (m).

 

1.3.3.Base Salary -  the Participant’s total salary and wages from RLI and all
Affiliates, including any amount that would be included in the definition of
Base Salary but for the individual’s election to defer some of such
Participant’s salary pursuant to the Plan or any other deferred compensation
plan established by RLI or any Affiliate; but excluding disability pay and any
other remuneration paid by RLI or its Affiliates, such as overtime, incentive
compensation, stock options, distributions of compensation previously deferred,
restricted stock, allowances for expenses (including moving, travel expenses,
and automobile allowances), and fringe benefits whether payable in cash or in a
form other than cash. In the case of an individual in a plan sponsored by RLI or
an Affiliate that is described in Section 401(k), 125 or 132(f) of the Code, the
term Base Salary shall include any amount that would be included in the
definition of Base Salary but for the individual’s election to reduce such
individual’s salary and have the amount of the reduction contributed to or used
to purchase benefits under such plan.

 

1.3.4.Beneficiary - the person or persons designated as such under Section 5.2.

 

1.3.5.Board - the Board of Directors of RLI.

 

1.3.6.Chief Executive Officer - the Chief Executive Officer of RLI.

 

1

1.3.7.Code - the Internal Revenue Code of 1986, as the same may be amended from
time to time.

 

1.3.8.Committee - the Executive Resources Committee of the Board.

 

1.3.9.Deferral Eligible Amounts -  with respect to a Participant for any period,
means the sum of such Participant’s Base Salary and Incentive Compensation for
such period.

 

1.3.10.Employee - a common-law employee of RLI or an Affiliate (while it is an
Affiliate).

 

1.3.11.ERISA - the Employee Retirement Income Security Act of 1974, as the same
may be amended from time to time. 

 

1.3.12.Incentive Compensation - the total remuneration of the Participant of the
Participant from RLI and all Affiliates under the various cash incentive
compensation programs maintained by RLI and all Affiliates, including, but not
limited to, amounts received under the Market Value Potential (“MVP”) Executive
Incentive Program and the Underwriting Profit Program (“UPP”), but excluding any
other type of remuneration paid by RLI or its Affiliates, such as Base Salary,
overtime, stock options, distributions of compensation previously deferred,
restricted stock, allowances for expenses, and fringe benefits. The Committee,
from time to time, shall designate those items of a Participant’s Compensation
deemed to be Incentive Compensation.

 

1.3.13.Measurement Fund - any mutual fund or other investment vehicle designated
by RLI from time to time to be available to Participants for purposes of
measuring the earnings to be credited to Accounts pursuant to Section 3.4 of the
Plan. 

 

1.3.14.Participant – an eligible Employee who enrolls as a Participant in the
Plan under Section 2.3. An Employee who becomes a Participant shall remain a
Participant in the Plan until the complete payment of the Participant’s Account
balance after the Participant’s Termination of Employment or death.

 

1.3.15.Performance-Based Compensation – the Incentive Compensation of the
Participant for a period where the amount of, or entitlement to, the Incentive
Compensation is contingent on the satisfaction of pre-established organizational
or individual performance criteria relating to a performance period of at least
12 consecutive months. Organizational or individual performance criteria are
considered pre-established if established in writing by no later than 90 days of
the commencement period of service to which the criteria relate, provided that
the outcome is substantially uncertain at the time the criteria are established.
Performance-Based Compensation may include payment based on performance criteria
that are not approved by the Board or the Compensation Committee of the Board or
by the stockholders of the Company. Performance-Based Compensation does not
include any amount or portion of any amount that will be paid either regardless
of performance, or based upon a level of performance that is substantially
certain to be met at the time the criteria are established.

 

1.3.16.Plan - the unfunded deferred compensation plan that is set forth in this
document, as the same may be amended from time to time. The name of the Plan is
the “RLI Corp. Executives Deferred Compensation Plan.”

 

1.3.17.Prior Agreement - an individual agreement entered into by an Employee and
RLI to provide deferred compensation opportunities to the Employee.

 

1.3.18.RLI - RLI Corp. and any Successor Corporation.

 

1.3.19.RLI Stock - the common stock of RLI.

 

1.3.20.Specified Employee - means an employee of RLI or an Affiliate who is
subject to the six-month delay rule described in Section 409A(2)(B)(i) of the
Code. RLI shall establish a written policy for identifying Specified Employees
in a manner consistent with Section 409A, which policy may be amended by RLI
from time to time as permitted by Section 409A.

2

 

1.3.21.Successor Corporation - any entity that succeeds to the business of RLI
through merger, consolidation, acquisition of all or substantially all of its
assets, or any other means and which elects before or within a reasonable time
after such succession, by appropriate action evidenced in writing, to continue
the Plan.

 

1.3.22.Termination of Employment - with respect to a Participant, means the
Participant’s separation from service with RLI and all Affiliates, within the
meaning of Section 409A(a)(2)(A)(i) of the Code and the regulations under such
section. Solely for this purpose, a Participant who is an eligible Employee will
be considered to have a Termination of Employment when the Participant dies,
retires, or otherwise has a termination of employment with RLI and all
Affiliates. The employment relationship is treated as continuing intact while
the Participant is on military leave, sick leave, or other bona fide leave of
absence if the period of such leave does not exceed six months, or if longer, so
long as the individual retains a right to reemployment with RLI or an Affiliate
under an applicable statute or by contract. For purposes hereof, a leave of
absence constitutes a bona fide leave of absence only if there is a reasonable
expectation that the Participant will return to perform services for RLI or an
Affiliate. If the period of leave exceeds six months and the individual does not
retain a right to reemployment under an applicable statute or by contract, the
employment relationship is deemed to terminate on the first date immediately
following such six-month period. Notwithstanding the foregoing, where a leave of
absence is due to any medically determinable physical or mental impairment that
can be expected to last for a continuous period of not less than six months,
where such impairment causes the employee to be unable to perform the duties of
such employee’s position of employment or any substantially similar position of
employment, RLI may substitute a 29-month period of absence for such six-month
period.

 

Whether a termination of employment has occurred is determined based on whether
the facts and circumstances indicate that RLI or its Affiliate and the
Participant reasonably anticipated that no further services will be performed
after a certain date or that the level of bona fide services the Participant
will perform after such date will permanently decrease to no more than 49
percent of the average level of bona fide services performed over the
immediately preceding 36-month period (or the full period of services if the
Participant has been providing services for less than 36 months).

 

Notwithstanding anything in Section 1.3.22 to the contrary, in determining
whether a Participant has had a Termination of Employment with RLI or an
Affiliate, an entity’s status as an “Affiliate” shall be determined substituting
“50 percent” for “80 percent” each place it appears in Section 1563(a)(1),(2),
and (3) and in Treasury Regulation Section 1.414(c)-2.

 

RLI shall have discretion to determine whether a Participant has experienced a
Termination of Employment in connection with an asset sale transaction entered
into by RLI or an Affiliate, provided that such determination conforms to the
requirements of Section 409A and the regulations and other guidance issued under
such section, in which case RLI’s determination shall be binding on the
Participant.

 

1.3.23.Vested – non-forfeitable.

 

1.3.24.Year - the calendar year.

 

1.4“Top-Hat” Plan.  The Plan is intended to be a “top-hat” plan – that is, an
unfunded plan maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated individuals
within the meaning of ERISA §§ 201(2), 301(a)(3) and 401(a)(1), which is exempt
from Parts 2, 3 and 4 of Title I of ERISA. The Plan also is a nonqualified
deferred compensation plan subject to Code § 409A. To the extent any provision
of the Plan does not satisfy the requirements contained in Code § 409A or in any
regulations or other guidance issued by the Treasury Department under Code §
409A, such provision will be applied in a manner consistent with such
requirements, regulations or guidance, notwithstanding any contrary provision of
the Plan or any inconsistent election made by a Participant.

 

 

 

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ARTICLE 2

 

PARTICIPATION

 

2.1Eligibility and Selection.  The following Employees shall be eligible to
enroll as Participants in the Plan:

 

(a)

Employees with the titles:  Chairman of the Board, Chief Executive Officer,
President and Senior Vice President; and

 

(b)

Such other Employees as the Committee, in its sole discretion, shall determine
from time to time, provided that each such Employee must;

 

(1)

Have the title of Vice President or above, and

 

(2)

Be expected to have compensation in excess of the Code § 401(a)(17) limit in the
Participant’s initial Year of eligibility.

 

2.2Notification.  RLI shall provide each eligible Employee with (i) written
notification of the Employee’s eligibility to participate in the Plan, and (ii)
either a copy of the Plan or written notification that such a copy is available
upon request.

 

2.3Enrollment.  An eligible Employee will be allowed to enroll in the Plan
during the thirty (30) day period coinciding with and following the date the
Employee is notified of the Employee’s initial eligibility to participate in
accordance with Section 2.2. Such an enrollment will be effective as of the date
it is made. Thereafter, an eligible Employee may elect to enroll for a Year
during the enrollment period established by RLI for such Year, which enrollment
period will be a period of not less than thirty (30) days that ends not later
than the last day of the prior Year. Enrollment must be made in such manner and
in accordance with such rules as may be prescribed for this purpose by RLI
(including by means of a voice response or other electronic system under
circumstances authorized by RLI).

 

2.4Elective Deferrals.

 

2.4.1.Elections.  A Participant may elect to reduce Deferral Eligible Amounts by
any dollar amount or whole percent, but not more than one-hundred percent
(100%). A separate reduction amount or percentage may apply to base compensation
and to bonuses. In addition, a Participant may make a separate election to
reduce his or her base compensation by an amount equal to the amount, if any,
distributed to the Participant in the applicable Year under the RLI Corp. 401k
Plan, or a successor thereto, and representing excess contributions for the
previous Year under Section 415(c) of the Code.  An election must be made in
such manner and in accordance with such rules as may be prescribed for this
purpose by RLI (including by means of a voice response or other electronic
system under circumstances authorized by RLI). An election must be made as part
of the enrollment described in Section 2.3.

 

2.4.2.Elections Relate to Services Performed After the Election and Are
Irrevocable.  An election will apply to all Deferral Eligible Amounts
attributable to services performed in a given Year, regardless of when such
Deferral Eligible Amounts would otherwise be payable to the Participant (for
example, an election to defer a bonus attributable to services performed in a
given Year but payable in the next Year, must be made as part of the enrollment
election made prior to the Year in which the services are performed). However,
an election will only be effective to defer Deferral Eligible Amounts earned
after the election is made, and not before. For example, an election made in
connection with a mid-year enrollment under Section 2.3 will only be effective
for Deferral Eligible Amounts attributable to services performed on and after
the effective date of the enrollment as provided in Section 2.3. An election
will apply solely with respect to the given Year – that is, an election will not
automatically be carried over and applied to the next Year.

 

Notwithstanding the foregoing, elections for Incentive Compensation that is
Performance-Based Compensation must be completed and submitted to the Company
not later than six months before the end of the performance period for the
Incentive Compensation; provided, however, that in order for such an election to
be valid, the Participant must perform services continuously from the beginning
of the performance period

4

(or the date the performance criteria are established, if later) through the
date the election is entered into, and provided further, that in no event may an
election be effective to defer Incentive Compensation after the Incentive
Compensation has become reasonably ascertainable. For purposes hereof, if
Incentive Compensation is a specific or calculable amount, the Incentive
Compensation is readily ascertainable if and when the amount is first
substantially certain to be paid. If Incentive Compensation is not a specific or
calculable amount, the Incentive Compensation, or any portion thereof, is
readily ascertainable when the amount is both calculable and substantially
certain to be paid. Accordingly, in general, any minimum amount that is both
calculable and substantially certain to be paid will be treated as readily
ascertainable.

 

In general, an election shall become irrevocable as of the last day of the
enrollment period applicable to it. However, if a Participant incurs an
“unforeseeable emergency,” as defined in Section 4.8(h), or becomes entitled to
receive a hardship distribution pursuant to Treas. Reg. § 1.401(k)-1(d)(3) after
the election otherwise becomes irrevocable, the election shall be cancelled as
of the date on which the Participant is determined to have incurred the
unforeseeable emergency or becomes eligible to receive the hardship distribution
and no further deferrals will be made under it. In addition, if a Participant
becomes “disabled” (as defined below), RLI may, in its discretion, cancel the
Participant’s election then in effect, provided that such cancellation is made
no later than the end of the Plan Year, or if later, the 15th day of the third
month following the date on which the Participant becomes disabled, and provided
further that RLI does not allow the Participant a direct or indirect election
regarding the cancellation. For purposes of the preceding sentence, “disability”
means any medically determinable physical or mental impairment resulting in the
Participant’s inability to perform the duties required by the Participant’s
position or any substantially similar position, where such impairment can be
expected to result in death or can be expected to last for a continuous period
of not less than six months.

 

2.4.3.Limits.  RLI may, in its sole discretion, limit the minimum or maximum
amount of deferrals that are allowed under the Plan by any Participant or any
group of Participants, provided that such limit is established prior to the
beginning of the Year or prior to enrollment of the affected Participant.

 

ARTICLE 3

 

ACCOUNTS

 

3.1Accounts.  RLI shall establish and maintain a separate Account for each
Participant. The Account shall be for recordkeeping purposes only and shall not
represent a trust fund or other segregation of assets for the benefit of the
Participant. A separate subaccount shall be established within each Account to
represent the amount deferred by a Participant for each Year in which the
Participant defers a Deferral Eligible Amount under the Plan.

 

3.2Credits to Accounts. Each Participant’s Account shall be credited from time
to time as provided in this Article 3.

 

3.3Elective Deferrals.  Each Deferral Eligible Amount which the Participant has
elected to defer under the Plan shall be credited to the Participant’s Account
on, or as soon as administratively practicable after, the date it would
otherwise be paid to the Participant.

 

3.4Hypothetical Investment Funds.  A Participant shall have the right to direct
the manner in which earnings are credited to the portion of such Participant’s
Account relating to amounts deferred on or after January 1, 2020 by electing to
have the Account notionally invested, in percentages elected by the Participant,
in hypothetical investment options, the value of which shall track either RLI
Stock or any of the Measurement Funds.  A Participant shall make such elections
in such manner and in accordance with such rules as may be prescribed for this
purpose by RLI (including by means of a voice response or other electronic
system under circumstances authorized by RLI).  The portion of each
Participant’s Account relating to amounts deferred prior to January 1, 2020
shall be notionally invested in RLI Stock.

 

3.4.1.To the extent a deferral is notionally invested in RLI Stock, the
Participant’s Account shall be credited with a hypothetical number of shares of
RLI Stock equal to the number of full and fractional shares that could be
purchased with such amount on, or as soon as administratively feasible after,
the date such

5

amount is credited to the Participant’s Account. The Participant’s Account shall
be credited with additional RLI Stock credits, equal to the number of full and
fractional shares of RLI Stock that could be purchased with any cash dividends
which would be payable on the RLI Stock credited to the Participant’s Account.
For this purposes, the share price on, or as soon as administratively
practicable after, the date the dividend is paid will be used. The Account also
will be adjusted for any stock split, redemption or similar event, in a manner
determined to be reasonable by RLI.

 

3.4.2.To the extent a deferral is notionally invested in a Measurement Fund, the
Participant’s Account shall be credited with a hypothetical number of shares of
such Measurement Fund, equal to the number of full and fractional shares that
could be purchased with such amount on, or as soon as administratively
practicable after, the date such amount is credited to the Participant’s
Account.

 

3.4.3.Notwithstanding any other provision of this Plan that may be interpreted
to the contrary, the RLI Stock and the Measurement Fund(s) are to be used for
measurement purposes only, and the allocation of each Participant’s Account to
RLI Stock or to a Measurement Fund, the calculation of additional amounts, and
the crediting or debiting of such additional amounts to such Participant’s
Account shall not be considered or construed in any manner as an actual
investment of such Participant’s Account in RLI Stock or any Measurement Fund.

 

3.5Charges to Accounts. As of the date any Plan benefit measured by the Account
is paid to the Participant or the Participant’s Beneficiary, the Account shall
be charged with the amount of such benefit payment.

 

ARTICLE 4

 

BENEFITS

 

4.1Vesting.   The Participant’s Account shall be fully (100%) Vested.

 

4.2Payment of Plan Benefits – Amounts Deferred Prior to January 1, 2020--General
Rule.    If the Participant has an Account balance that relates to amounts
deferred in Years prior to January 1, 2020, RLI shall pay that balance to the
Participant, according to their enrollment election on file, in five (5), ten
(10) or fifteen (15) annual installments, commencing after the Participant’s
Termination of Employment, as follows:

 

(a)

Time.  The first installment shall be paid on the January 1 following the Year
in which the Participant's Termination of Employment occurs. The remaining
installments shall be paid on each subsequent January 1.

 

(b)

Amount.  The amount of each installment shall be determined using a "fractional"
method - by multiplying the Participant's Account balance immediately before the
installment payment date by a fraction, the numerator of which is one and the
denominator of which is the number of installments remaining (including the
installment in question).

 

4.3Payment of Plan Benefits – Amounts Deferred On or After January 1,
2020--General Rule.    If the Participant has an Account balance that relates to
amounts deferred in Years beginning on or after January 1, 2020, RLI shall pay
that balance to the Participant as follows:

 

(a)

Time.  At the time the Participant elects to defer Deferral Eligible Amounts
earned in a particular Year, the Participant shall elect to receive a
distribution of the subaccount relating to such deferrals on or beginning on any
of the following distribution dates (the applicable date, a “Distribution
Date”): (i) January 1st of the Year following the Participant’s Termination of
Employment, (ii) January 1st of any Year designated by the Participant that is
not less than two years and not more than 20 years after the beginning of the
Year to which such deferral relates or (iii) the earlier of (A) January 1st of
the Year following the Participant’s Termination of Employment and (B) January
1st of any Year designated by the Participant that is not less than two years
and not more than 20 years after the beginning of the Year to which such
deferral relates.

6

 

(b)

Form of Payment.  At the time the Participant elects to defer Deferral Eligible
Amounts earned in a particular Year, the Participant shall elect to receive the
distribution of the subaccount relating to such deferrals in one of the
following forms of distribution: (i) a lump sum payment or (ii) annual
installments over a period of not less than five years and not more than 15
years. 

 

 

(c)

Payment of Installments.  If the Participant elects to receive a distribution in
the form of installments, the first installment shall be paid on the
Distribution Date elected in accordance with Section 4.3(a), and the remaining
installments shall be paid on January 1st of each subsequent Year until the
applicable subaccount has been distributed in its entirety.  A distribution that
is paid in the form of installments shall be considered a single payment for
purposes of Section 409A of the Code.  The amount of each installment shall be
determined using a “fractional” method – by multiplying the Participant’s
Account balance immediately before the installment payment date by a fraction,
the numerator of which is one and the denominator of which is the number of
installments remaining (including the installment in question). If the
distribution is made in shares of RLI Stock pursuant to Section 4.6.1, the
result shall be rounded down to the next lower full share of RLI Stock, except
for the final installment, which shall distribute the final shares and pay cash
in lieu of any partial share

 

4.4Changing Payment Elections.

 

4.4.1.General Rule.  A Participant may elect to change the Distribution Date or
the form of distribution (i.e., from a lump sum to installments, from
installments to a lump sum or the number of installments), subject to the rules
below. Any such election must be made in such manner and in accordance with such
rules as may be prescribed for this purpose by RLI (including by means of a
voice response or other electronic system under circumstances authorized by
RLI).

 

4.4.2Subsequent Election.  A Participant may change the Distribution Date or the
form of distribution in accordance with the following rules:

 

(a)

The election must be received by RLI in writing and in proper form and must not
take effect for at least 12 months from the date on which it is submitted to
RLI;

 

(b)

The election must be submitted to RLI at least 12 months prior to the previously
elected Distribution Date; and 

 

(c)

The Distribution Date must be delayed at least five (5) years from the
previously elected Distribution Date.

 

4.5Special Rules.

 

4.5.1.Specified Employee Exception.  If a Participant is a Specified Employee
and the Distribution Date occurs upon the Participant’s Termination of
Employment, the Distribution Date shall be delayed to the later of (i) the
January 1 following the Year in which the Participant’s Termination of
Employment occurs or (ii) the first day of the seventh month following the
Participant’s Termination of Employment. This delay shall not apply in the event
of the Participant’s death. If the subaccount is paid in the form of
installments, any subsequent annual installments shall be paid as described in
Section 4.3(c). 

 

4.5.2.Acceleration of Small Amounts. Any contrary provision or election
notwithstanding, if the Participant’s Account balance is less than one hundred
thousand dollars ($100,000) as of the date installments are to commence, the
Account shall be paid to the Participant in a single lump-sum, as full
settlement of all benefits due under the Plan; provided that, for purposes of
applying the one hundred thousand dollar ($100,000) acceleration limit, all
nonqualified deferred compensation amounts payable to the Participant by RLI and
its Affiliates shall be aggregated if and to the extent required under Code §
409A or any regulations or other guidance issued by the Treasury Department
thereunder.

7

 

4.6Medium of Payments. 

 

4.6.1.RLI Stock.  To the extent a Participant’s Account is deemed to be invested
in RLI Stock, the payment of the Account shall be made in whole shares of RLI
Stock, except for a cash payment in lieu of a partial share as may be necessary.
Unless the shares have been registered under the Securities Act of 1933 (the
“Act”), are otherwise exempt from the registration requirements of the Act, are
the subject of a favorable no action letter issued by the Securities and
Exchange Commission, or are the subject of an opinion of counsel acceptable to
RLI to the effect that such shares are exempt from the registration requirements
of the Act, the transfer of such shares shall be subject to the provisions of
Rule 144 of the Act, as the same may be amended from time to time. 

 

4.6.2.Measurement Funds.  To the extent a Participant’s Account is deemed to be
invested in a Measurement Fund, the payment of the Account shall be made in
cash. 

 

4.7Delay in Distributions.  A payment under the Plan may be delayed by RLI under
any of the following circumstances so long as all payments to similarly situated
Participants are treated on a reasonably consistent basis:

 

(a)

RLI reasonably anticipates that the making of the payment will violate Federal
securities laws or other applicable law, provided that the payment is made at
the earliest date at which RLI reasonably anticipates that the making of the
payment will not cause such violation.

 

(b)

Upon such other events as determined by RLI and according to such terms as are
consistent with Section 409A or are prescribed by the Commissioner of Internal
Revenue.

 

4.8Acceleration of Distributions.  RLI may, in its discretion, distribute all or
a portion of a Participant’s Accounts at an earlier time and in a different form
than specified as otherwise provided in this Article 4, under the circumstances
described below:

 

(a)

As may be necessary to fulfill a Domestic Relations Order. Distributions
pursuant to a Domestic Relations Order shall be made according to administrative
procedures established by RLI.

 

(b)

To the extent reasonably necessary to avoid the violation of ethics laws or
conflict of interest laws pursuant to Section 1.409A-3(j)(ii) of the Treasury
regulations.

 

(c)

To pay FICA on amounts deferred under the Plan and the income tax resulting from
such payment.

 

(d)

To pay the amount required to be included in income as a result of the Plan’s
failure to comply with Section 409A.

 

(e)

If RLI determines, in its discretion, that it is advisable to liquidate the Plan
in connection with a termination of the Plan subject to the requirements of
Section 409A.

 

(f)

As satisfaction of a debt of the Participant to RLI or an Affiliate, where such
debt is incurred in the ordinary course of the service relationship between RLI
or the Affiliate and the Participant, the entire amount of the reduction in any
Plan Year does not exceed $5,000, and the reduction is made at the same time and
in the same amount as the debt otherwise would have been due and collected from
the Participant.

 

(g)

To pay state, local or foreign tax obligations that may arise with respect to
amounts deferred under the Plan and the income tax resulting from such payment.

 

(h)

If the Participant has an unforeseeable emergency. For these purposes an
“unforeseeable emergency” is a severe financial hardship to the Participant,
resulting from an illness or accident of the Participant, the Participant’s
spouse, the Beneficiary, or the Participant’s dependent (as

8

defined in Section 152, without regard to Section 152(b)(1), (b)(2), and
(d)(1)(B) of the Code); loss of the Participant’s property due to casualty
(including the need to rebuild a home following damage to a home not otherwise
covered by insurance); or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant. For example, the imminent foreclosure of or eviction from the
Participant’s primary residence may constitute an unforeseeable emergency. In
addition, the need to pay for medical expenses, including non-refundable
deductibles, as well as for the cost of prescription drug medication, may
constitute an unforeseeable emergency. Finally, the need to pay for funeral
expenses of a spouse, Beneficiary, or a dependent (as defined in Section 152,
without regard to 152(b)(1), (b)(2), and (d)(1)(B) of the Code) may also
constitute an unforeseeable emergency. Except as otherwise provided in this
paragraph (h), the purchase of a home and the payment of college tuition are not
unforeseeable emergencies. Whether a Participant is faced with an unforeseeable
emergency permitting a distribution under this paragraph (h) is to be determined
based on the relevant facts and circumstances of each case, but, in any case 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, by liquidation of the Participant’s
assets, to the extent the liquidation of such assets would not cause severe
financial hardship, or by cessation of elective deferrals.

 

Distributions because of an unforeseeable emergency must be limited to the
amount reasonably necessary to satisfy the emergency need (which may include
amounts necessary to pay any Federal, state, local, or foreign income taxes or
penalties reasonably anticipated to result from the distribution). A
determination of the amounts reasonably necessary to satisfy the emergency need
must take into account any additional compensation that is available due to
cancellation of the Participant’s election as a result of this paragraph (h).

 

Notwithstanding anything in this Section 4.8 to the contrary, except for a
Participant’s election to request a distribution due to an unforeseeable
emergency under paragraph (h), above (which the Participant, in the
Participant’s discretion, may elect to make or not make), RLI shall not provide
the Participant with discretion or a direct or indirect election regarding
whether a payment is accelerated pursuant to this Section 4.8.

 

4.9When a Payment is Deemed to be Made.  Any payment that is due to be
distributed as of a particular date pursuant to the provisions of the Plan, will
be deemed to be distributed as of that date if it is distributed on such date or
a later date within the same calendar year, or, if later, by the 15th day of the
third calendar month following the date, and the Participant is not permitted,
directly or indirectly, to designate the calendar year of payment. Further, a
payment will be treated as made on a date if it is made no earlier than 30 days
before the date, and the Participant is not permitted, directly or indirectly,
to designate the calendar year of payment. For purposes of the foregoing, if the
payment is required to be made during a period of time, the specified date is
treated as the first day of the period of time.

 

ARTICLE 5

 

DEATH BENEFITS

 

5.1Death Benefits.

 

5.1.1.Benefits When Participant Dies Before Commencement of Payments.  If the
Participant dies before payment of the Participant’s Account has commenced, the
Participant’s Account balance shall be paid to the Participant’s Beneficiary in
a lump sum payment within 90 days after the date of death.    

 

5.1.2.Benefits When Participant Dies After Commencement of Payments. If the
Participant dies after installments commence and the Participant has an Account
balance at death, the remaining Account balance shall be paid to the
Participant’s Beneficiary in a lump sum payment within 90 days after the date of
death.  

 

9

5.1.3.Medium of Payments.  To the extent a Participant’s Account is deemed to be
invested in RLI Stock, the payment of the Account shall be made in whole shares
of RLI Stock, except for a cash payment in lieu of a partial share as may be
necessary. To the extent a Participant’s Account is deemed to be invested in a
Measurement Fund, the payment of the Account shall be made in cash.

 

5.1.4.Acceleration of Small Amounts.  Any contrary provision or election
notwithstanding, if the amount payable to the Beneficiary is less than one
hundred thousand dollars ($100,000) as of the date installments are to commence,
the benefit shall be paid to the Beneficiary in a single lump-sum, as full
settlement of all benefits due under the Plan, subject, however, to any
limitation on such acceleration under Code § 409A or any regulations or other
guidance issued by the Treasury Department thereunder.

 

5.2Designation of Beneficiary.

 

5.2.1.Persons Eligible to Designate.  Any Participant may designate a
Beneficiary to receive any amount payable under the Plan as a result of the
Participant’s death, provided that the Beneficiary survives the Participant. The
Beneficiary may be one or more persons, natural or otherwise. By way of
illustration, but not by way of limitation, the Beneficiary may be an
individual, trustee, executor, or administrator. A Participant may also change
or revoke a designation previously made, without the consent of any Beneficiary
named therein.

 

5.2.2.Form and Method of Designation.  Any designation or a revocation of a
prior designation of Beneficiary shall be in writing on a form acceptable to RLI
and shall be filed with RLI. RLI and all other parties involved in making
payment to a Beneficiary may rely on the latest Beneficiary designation on file
with RLI at the time of payment or may make payment pursuant to Section 5.2.3 if
an effective designation is not on file, shall be fully protected in doing so,
and shall have no liability whatsoever to any person making claim for such
payment under a subsequently filed designation of Beneficiary or for any other
reason.

 

Notwithstanding any provision of this Section 5.2 to the contrary, any
Beneficiary designation made under the Prior Agreements will continue in effect
under this Plan until modified by the Participant pursuant to this Section 5.2.

 

5.2.3.No Effective Designation.  If there is not on file with RLI an effective
designation of Beneficiary by a deceased Participant, the Beneficiary shall be
the person or persons surviving the Participant in the first of the following
classes in which there is a survivor, share and share alike:

 

(a)

The Participant’s spouse. (A “spouse” is a person to whom the Participant is
legally married, including a common-law spouse if the marriage was entered into
in a state that recognizes common-law marriages and RLI has received acceptable
proof and/or certification of common-law married status.)

 

(b)

The Participant’s then living descendants, per stirpes.

 

(c)

The Participant’s estate.

 

Determination of the identity of the Beneficiary in each case shall be made by
RLI.

 

5.2.4.Successor Beneficiary.  If a Beneficiary who survives the Participant
subsequently dies before receiving the complete payment to which the Beneficiary
was entitled, the successor Beneficiary, determined in accordance with the
provisions of this section, shall be entitled to the payments remaining. The
successor Beneficiary shall be the person or persons surviving the Beneficiary
in the first of the following classes in which there is a survivor, share and
share alike:

 

(a)

The Participant’s spouse. (A “spouse” is a person to whom the Participant is
legally married, including a common-law spouse if the marriage was entered into
in a state that recognizes common-law marriages and RLI has received acceptable
proof and/or certification of common-law married status.)

10

 

(b)

The Participant’s then living descendants, per stirpes.

 

(c)

The Participant’s estate.

 

ARTICLE 6

 

CLAIMS AND REVIEW PROCEDURES

 

6.1Application for Benefits.  Benefits shall be paid to Participants
automatically (without a written request) at the time and in the manner
specified in the Plan. Benefits shall be paid to a Beneficiary upon RLI’s
receipt of a written request for the benefits, including appropriate proof of
the Participant’s death and the Beneficiary’s identity and right to payment.
This written request shall be considered a claim for the purposes of this
article.

 

6.2Claims and Review Procedures.  The claims and review procedures set forth in
this article shall be the mandatory claims and review procedures for the
resolution of disputes and disposition of claims filed under the Plan.

 

6.2.1.Initial Claim.  An individual may, subject to any applicable deadline,
file with the Committee a written claim for benefits under the Plan in a form
and manner prescribed by RLI.

 

(a)

If the claim is denied in whole or in part, the Committee shall notify the
claimant of the adverse benefit determination within ninety (90) days after
receipt of the claim.

 

(b)

The ninety (90) day period for making the claim determination may be extended
for ninety (90) days if the Committee determines that special circumstances
require an extension of time for determination of the claim, provided that the
Committee notifies the claimant, prior to the expiration of the initial ninety
(90) day period, of the special circumstances requiring an extension and the
date by which a claim determination is expected to be made.

 

6.2.2.Notice of Initial Adverse Determination. A notice of an adverse
determination shall set forth in a manner calculated to be understood by the
claimant: 

 

(a)

The specific reasons for the adverse determination;

 

(b)

References to the specific provisions of the Plan (or other applicable document)
on which the adverse determination is based;

 

(c)

A description of any additional material or information necessary to perfect the
claim and an explanation of why such material or information is necessary; and

 

(d)

A description of the claims review procedures, including the time limits
applicable to such procedures.

 

6.2.3.Request for Review.  Within ninety (90) days after receipt of an initial
adverse benefit determination notice, the claimant may file with the Board a
written request for a review of the adverse determination and may, in connection
therewith submit written comments, documents, records and other information
relating to the claim benefits.  Any request for review of the initial adverse
determination not filed within ninety (90) days after receipt of the initial
adverse determination notice shall be untimely.

 

6.2.4.Claim on Review.  If the claim, upon review, is denied in whole or in
part, the Board shall notify the claimant of the adverse benefit determination
within sixty (60) days after receipt of such a request for review.

 

(a)

The sixty (60) day period for deciding the claim on review may be extended for
sixty (60) days if the Board determines that special circumstances require an
extension of time for determination of the claim, provided that the Board
notifies the claimant, prior to the expiration

11

of the initial sixty (60) day period, of the special circumstances requiring an
extension and the date by which a claim determination is expected to be made.

 

(b)

In the event that the time period is extended due to a claimant’s failure to
submit information necessary to decide a claim on review, the claimant shall
have sixty (60) days within which to provide the necessary information and the
period for making the claim determination on review shall be tolled from the
date on which the notification of the extension is sent to the claimant until
the date on which the claimant responds to the request for additional
information or, if earlier, the expiration of sixty (60) days.

 

(c)

The Board's review of a denied claim shall take into account all comments,
documents, records, and other information submitted by the claimant relating to
the claim, without regard to whether such information was submitted or
considered in the initial benefit determination.

 

6.2.5.Notice of Adverse Determination for Claim on Review.  A notice of an
adverse determination for a claim on review shall set forth in a manner
calculated to be understood by the claimant:

 

(a)

The specific reasons for the denial;

 

(b)

References to the specific provisions of the Plan (or other applicable document)
on which the adverse determination is based; and

 

(c)

A statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records, and other
information relevant to the claimant’s claim for benefits.

 

6.3Claims Rules.

 

(a)

No inquiry or question shall be deemed to be a claim or a request for a review
of a denied claim unless made in accordance with the established claims and
review procedures. RLI may require that any claim for benefits and any request
for a review of a denied claim be filed on forms to be furnished by RLI upon
request.

 

(b)

All decisions on claims and on requests for a review of denied claims shall be
made by RLI.

 

(c)

Claimants may be represented by a lawyer or other representative at their own
expense, but RLI reserves the right to (i) require the claimant to furnish
written authorization and (ii) establish reasonable procedures for determining
whether an individual has been authorized to act on behalf of a claimant. A
claimant’s representative shall be entitled to copies of all notices given to
the claimant.

 

(d)

The decision of RLI on a claim and on a request for a review of a denied claim
may be provided to the claimant in electronic form instead of in writing at the
discretion of RLI.

 

(e)

In connection with the review of a denied claim, the claimant or the claimant’s
representative shall be provided, upon request and free of charge, reasonable
access to, and copies of, all documents, records, and other information relevant
to the claimant’s claim for benefits.

 

(f)

The time period within which a benefit determination will be made shall begin to
run at the time a claim or request for review is filed in accordance with the
claims and review procedures, without regard to whether all the information
necessary to make a benefit determination accompanies the filing.

 

(g)

The claims and review procedures shall be administered with appropriate
safeguards so that benefit claim determinations are made in accordance with
governing Plan documents and,

12

where appropriate, the Plan provisions have been applied consistently with
respect to similarly situated claimants.

 

(h)

For the purpose of this article, a document, record, or other information shall
be considered “relevant” if such document, record, or other information:  (i)
was relied upon in making the benefit determination; (ii) was submitted,
considered, or generated in the course of making the benefit determination,
without regard to whether such document, record, or other information was relied
upon in making the benefit determination; or (iii) demonstrates compliance with
the administration processes and safeguards designed to ensure that the benefit
claim determination was made in accordance with governing Plan documents and
that, where appropriate, the Plan provisions have been applied consistently with
respect to similarly situated claimants.

 

(i)

RLI may, in its discretion, rely on any applicable statute of limitation or
deadline as a basis for denial of any claim.

 

6.4Deadline to File Claim.  To be considered timely under the Plan’s claims and
review procedures, a claim must be filed with the Committee within one (1) year
after the claimant knew or reasonably should have known of the principal facts
upon which the claim is based.

 

6.5Exhaustion of Administrative Remedies.  The exhaustion of the claims and
review procedures is mandatory for resolving every claim and dispute arising
under the Plan. As to such claims and disputes no claimant shall be permitted to
commence an arbitration action to recover Plan benefits or to enforce or clarify
rights under the Plan or under any provision of the law, whether or not
statutory, until the claims and review procedures set forth herein have been
exhausted in their entirety.

 

6.6Arbitration.  Any claim, dispute or other matter in question of any kind
relating to the Plan which is not resolved by the claims and review procedures
shall be settled by arbitration in accordance with the Federal Arbitration Act 9
U.S.C. §1, et seq. Notice of demand for arbitration must be made in writing to
the opposing party within the time period specified in Section 6.7. In no event
will a demand for arbitration be made after the date when the applicable statute
of limitations would bar the institution of a legal or equitable proceeding
based on such claim, dispute or other matter in question. The decision of the
arbitrator(s) will be final and may be enforced in any court of competent
jurisdiction. The arbitrator(s) may award reasonable fees and expenses to the
prevailing party in any dispute hereunder and will award reasonable fees and
expenses in the event that the arbitrator(s) find that the losing party acted in
bad faith or with intent to harass, hinder or delay the prevailing party in the
exercise of its rights in connection with the matter under dispute. The
arbitration will take place in Peoria, Illinois, unless otherwise agreed by the
parties.

 

6.7Deadline to File an Arbitration Action.  No arbitration action to recover
Plan benefits or to enforce or clarify rights under the Plan under or under any
provision of the law, whether or not statutory, may be brought by any claimant
on any matter pertaining to the Plan unless the action is commenced before the
earlier of:

 

(a)

Thirty (30) months after the claimant knew or reasonably should have known of
the principal facts on which the claim is based, or

 

(b)

Six (6) months after the claimant has exhausted the claims and review
procedures.

 

6.8Knowledge of Fact by Participant Imputed to Beneficiary.  Knowledge of all
facts that a Participant knew or reasonably should have known shall be imputed
to every claimant who is or claims to be a Beneficiary of the Participant or
otherwise claims to derive an entitlement by reference to the Participant for
the purpose of applying the previously specified periods.

 

6.9Deferral of Payment.  If there is a dispute regarding a Plan benefit, RLI, in
its sole discretion, may defer payment of the benefit until the dispute has been
resolved.

 

 

 

 

13

ARTICLE 7

 

ADMINISTRATION

 

7.1Administrator.  RLI shall be the administrator of the Plan. RLI shall control
and manage the administration and operation of the Plan and shall make all
decisions and determinations incident thereto. Except with respect to the
ordinary day-to-day administration of the Plan, action on behalf of RLI must be
taken by one of the following:

 

(a)

The Board; or

 

(b)

The Committee.

 

7.1.1.Delegation.  The ordinary day-to-day administration of the Plan may be
delegated by the Chief Executive Officer to an individual or a committee. Such
individual or committee shall have the authority to delegate or redelegate to
one or more persons, jointly or severally, such functions assigned to such
individual or committee as such individual or committee may from time to time
deem advisable. 

 

7.1.2.Automatic Removal.  If any individual or committee member to whom
responsibility under the Plan is allocated is a director, officer or employee of
RLI when responsibility is so allocated, then such individual shall be
automatically removed as a member of a committee at the earliest time such
individual ceases to be a director, officer or employee of RLI. This removal
shall occur automatically and without any requirement for action by RLI or any
notice to the individual so removed.

 

7.1.3.Conflict of Interest.  If any individual or committee member to whom
responsibility under the Plan is allocated is also a Participant or Beneficiary,
that individual or committee member shall have no authority as such member with
respect to any matter specifically affecting such individual’s interest
hereunder (as distinguished from the interests of all Participants and
Beneficiaries or a broad class of Participants and Beneficiaries), all such
authority being reserved exclusively to the other members to the exclusion of
such individual, and such Participant or Beneficiary shall act only in an
individual capacity in connection with any such matter. 

 

7.1.4.Binding Effect.  The determination of the Board, the Committee or the
Chief Executive Officer in any matter within its authority shall be binding and
conclusive upon RLI and all persons having any right or benefit under the Plan. 

 

7.1.5.Third-Party Service Providers.  RLI may from time to time appoint or
contract with an administrator, record keeper or other third-party service
provider for the Plan. Any such administrator, record keeper or other
third-party service provider will serve in a nondiscretionary capacity and will
act in accordance with directions given and procedures established by RLI.

 

7.2Benefits Not Transferable.  No Participant or Beneficiary shall have the
power to transmit, alienate, dispose of, pledge or encumber any benefit payable
under the Plan before its actual payment to the Participant or Beneficiary. Any
such effort by a Participant or Beneficiary to convey any interest in the Plan
shall not be given effect under the Plan. No benefit payable under the Plan
shall be subject to attachment, garnishment, execution following judgment or
other legal process before its actual payment to the Participant or Beneficiary.
   

 

7.3Benefits Not Secured.  The rights of each Participant and Beneficiary shall
be solely those of an unsecured, general creditor of RLI.  No Participant or
Beneficiary shall have any lien, prior claim or other security interest in any
property of RLI. 

 

7.4RLI’s Obligations. RLI shall provide the benefits under the Plan. RLI’s
obligation may be satisfied by distributions from a trust fund created and
maintained by RLI, in its sole discretion, for such purpose. However, the assets
of any such trust fund shall be subject to claims by the general creditors of
RLI in the event RLI is (i) unable to pay its debts as they become due, or (ii)
is subject to a pending proceeding as a debtor under the United States
Bankruptcy Code.

 

14

7.5Withholding Taxes.  RLI shall have the right to withhold (and transmit to the
proper taxing authority) such federal, state or local taxes, including (but not
limited to) FICA and FUTA taxes, as it may be required to withhold by applicable
laws. Such taxes may be withheld from any benefits due under the Plan or from
any other compensation to which the Participant is entitled from RLI and its
Affiliates.

 

7.6Service of Process.  The Chief Executive Officer is designated as the
appropriate and exclusive agent for the receipt of service of process directed
to the Plan in any legal proceeding, including arbitration, involving the Plan.

 

7.7Limitation on Liability.  Neither RLI’s officers nor any member of its Board
nor any individual or committee to whom RLI delegates responsibility under the
Plan in any way secures or guarantees the payment of any benefit or amount which
may become due and payable hereunder to or with respect to any Participant. Each
Participant and other person entitled at any time to payments hereunder shall
look solely to the assets of RLI for such payments as an unsecured, general
creditor. After benefits have been paid to or with respect to a Participant and
such payment purports to cover in full the benefit hereunder, such former
Participant or other person(s), as the case may be, shall have no further right
or interest in the other assets of RLI in connection with the Plan. Neither RLI
nor any of its officers nor any member of its Board nor any individual or
committee to whom RLI delegates responsibility under the Plan shall be under any
liability or responsibility for failure to effect any of the objectives or
purposes of the Plan by reason of the insolvency of RLI.

 

ARTICLE 8

 

AMENDMENT AND TERMINATION

 

8.1Amendment.  RLI reserves the power to amend the Plan either prospectively or
retroactively or both, in any respect, by action of its Board; provided that, no
amendment shall be effective to reduce or divest benefits payable with respect
to the Account of any Participant or Beneficiary without consent. No amendment
of the Plan shall be effective unless it is in writing and signed on behalf of
RLI by a person authorized to execute such writing. No oral representation
concerning the interpretation or effect of the Plan shall be effective to amend
the Plan. 

 

8.2Termination.  RLI reserves the right to terminate the Plan at any time by
action of its Board; provided that, the termination of the Plan shall not reduce
or divest benefits payable with respect to the Account of any Participant or
Beneficiary or negate the Participant’s or Beneficiary’s rights with respect to
such benefits. Any such termination will be done in accordance with the
requirements of Section 409A.

 

ARTICLE 9

 

MISCELLANEOUS

 

9.1Effect on Other Plans.  This Plan shall not alter, enlarge or diminish any
person’s rights or obligations under any other benefit plan maintained by RLI or
any Affiliate.

 

9.2Effect on Employment. Neither the terms of this Plan nor the benefits
hereunder nor the continuance thereof shall be a term of the employment of any
Employee. RLI shall not be obliged to continue the Plan. The terms of this Plan
shall not give any Employee the right to be retained in the service of RLI or
any Affiliate.

 

9.3Disqualification.  Notwithstanding any other provision of the Plan or any
designation made under the Plan, any individual who feloniously and
intentionally kills a Participant shall be deemed for all purposes of the Plan
and all elections and designations made under the Plan to have died before such
Participant. A final judgment of conviction of felonious and intentional killing
is conclusive for this purpose. In the absence of a conviction of felonious and
intentional killing, RLI shall determine whether the killing was felonious and
intentional for this purpose.

 

9.4Rules of Document Construction.  Whenever appropriate, words used herein in
the singular may be read in the plural, or words used herein in the plural may
be read in the singular; and the words “hereof,” “herein” or “hereunder” or
other similar compounds of the word “here” shall mean and refer to the entire
Plan and not to any particular article, section or paragraph of the Plan unless
the context clearly indicates to the contrary. The titles given to the various
articles and sections of the Plan are inserted for convenience of reference only
and are not part of the

15

Plan, and they shall not be considered in determining the purpose, meaning or
intent of any provision hereof. Written notification under the Plan shall
include such other methods (for example, facsimile or e-mail) as RLI, in its
sole discretion, may authorize from time to time. 

 

9.5References to Laws.  Any reference in the Plan to a statute shall be
considered also to mean and refer to the applicable regulations for that
statute. Any reference in the Plan to a statute or regulation shall be
considered also to mean and refer to any subsequent amendment or replacement of
that statute or regulation. 

 

9.6Choice of Law.  The Plan has been executed in the State of Illinois and has
been drawn in conformity to the laws of that state and shall, except to the
extent that federal law is controlling, be construed and enforced in accordance
with the laws of the State of Illinois (without regard to its conflict of law
principles).

 

9.7Binding Effect.  The Plan shall be binding upon and inure to the benefit of
the successors and assigns of RLI, and the Beneficiaries, personal
representatives and heirs of the Participant.

16

****Signature Page to RLI Corp. Executives Deferred Compensation Plan

Restated 1/1/2020 ****

 

IN WITNESS WHEREOF, RLI Corp. has caused the Plan to be executed by its duly
authorized officers as of the 13th day of November, 2019.

 

 

 

RLI Corp.

 

 

By:  Jonathan E. Michael

 

Title:  Chairman & CEO

 

 

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