Exhibit 10.12

ARTHUR J. GALLAGHER & CO.

DEFERRAL PLAN FOR NONEMPLOYEE DIRECTORS

AMENDED AND RESTATED AS OF JANUARY 1, 2011

ARTICLE I

Purpose

The purpose of this Arthur J. Gallagher & Co. Deferral Plan for Nonemployee
Directors is to provide Nonemployee Directors with the opportunity to defer the
receipt of all or a portion of the Annual Retainer or Restricted Stock Awards
which they earn as directors of the Company. All capitalized terms used in the
Plan shall have the meanings set forth in Article II.

ARTICLE II

Definitions

“Annual Retainer” means the annual cash retainer earned by a Nonemployee
Director for his or her service on the Board or any committee thereof. Annual
Retainer does not include the portion, if any, of the annual cash retainer
earned by a Nonemployee Director that he or she elected to receive in the form
of a nonqualified stock option pursuant to the terms of the Arthur J.
Gallagher & Co. 2009 Long-Term Incentive Plan, as amended from time to time, or
any successor plan thereto.

“Board” means the Board of Directors of the Company.

“Code” means the Internal Revenue Code of 1986, as amended.

“Committee” means the Compensation Committee of the Board.

“Common Stock” means the common stock of the Company, par value $1.00 per share.

“Company” means Arthur J. Gallagher & Co., a Delaware corporation.

“Deferral” shall have the meaning set forth in Section 4.2.

“Deferral Account” means a bookkeeping account in the name of a Nonemployee
Director who elects to defer, pursuant to the Plan, all or a portion of his or
her Annual Retainer or Restricted Stock Awards.

“Deferral Election” shall have the meaning set forth in Section 4.2.

“Distribution Date” shall have the meaning set forth in Section 6.1.

“Effective Date” means January 1, 2011.

“Fair Market Value” means the closing transaction price of a share of Common
Stock as reported on the New York Stock Exchange on the date as of which such
value is being determined or, if the Common Stock is not listed on the New York
Stock Exchange, the closing transaction price of a share of Common Stock on the
principal national stock exchange on which the Common Stock is traded on the
date as of which such value is being determined or, if there shall be no
reported transactions for such date, on the next preceding date for which
transactions were reported; provided, however, that if the Common Stock is not
listed on a national stock exchange or if Fair Market Value for any date cannot
be so determined, Fair Market Value shall be determined by the Committee by
whatever means or method as the Committee, in the good faith exercise of its
discretion, shall at such time deem appropriate.

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“Nonemployee Director” means any director serving on the Board, other than a
director who is an officer or employee of the Company or any Subsidiary.

“Plan” means this Arthur J. Gallagher & Co. Deferral Plan for Nonemployee
Directors, as amended from time to time.

“Plan Year” means the 12-month period coinciding with the calendar year.

“Restricted Stock Award” means an award of restricted stock units granted to a
Nonemployee Director for his or her service on the Board or any committee
thereof.

“Separation Date” means the date on which a Nonemployee Director separates from
service as a director of the Company, within the meaning of Section 409A of the
Code.

“Share Unit” means a bookkeeping unit credited to a Nonemployee Director’s
Deferral Account and having a value equal to one share of Common Stock.

“Subsidiary” means any corporation or other business entity, the majority of the
outstanding voting stock or other equity interests of which are owned, directly
or indirectly, by the Company.

“Trust” shall have the meaning set forth in Article IX.

“Unforeseeable Emergency” means (i) a severe financial hardship to a Nonemployee
Director resulting from an illness or accident of the Nonemployee Director, or
the spouse or a dependent (as defined in Section 152(a) of the Code) of the
Nonemployee Director, (ii) the loss of a Nonemployee Director’s property due to
casualty or (iii) such other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Nonemployee Director, within the meaning of Section 409A of the Code.

ARTICLE III

Administration

The Plan shall be administered by the Committee. The Committee shall, subject to
the terms of this Plan, interpret this Plan and the application thereof, and
establish rules and regulations it deems necessary or desirable for the
administration of this Plan. All such interpretations, rules and regulations
shall be final, binding and conclusive. The Committee may delegate
administrative duties under the Plan to one or more employees or agents of the
Company or its Subsidiaries, as it shall deem necessary or advisable. The
Company shall indemnify and hold harmless the members of the Committee, and any
agent to whom duties of the Committee may be delegated, against any and all
claims, losses, damages, expenses or liabilities arising from any action or
failure to act with respect to the Plan, except in the case of willful
misconduct by the Committee or any of its members or any such agent.

 

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ARTICLE IV

Deferral Elections

Section 4.1. Eligibility for Deferral Elections. Each Nonemployee Director shall
be eligible to participate in the Plan. A Nonemployee Director shall be eligible
to make a Deferral Election pursuant to Section 4.2 if he or she serves as a
Nonemployee Director or has been elected to serve as a Nonemployee Director on
the date such election is made.

Section 4.2. Election Procedures. Prior to the first day of a Plan Year, each
Nonemployee Director may make an election to defer the receipt of all or any
portion of the Annual Retainer to be earned by such Nonemployee Director or the
Restricted Stock Awards to be granted to such Nonemployee Director in such Plan
Year (each such election shall be referred to as a “Deferral Election” and the
amounts deferred pursuant to such an election the “Deferral”). Notwithstanding
the foregoing, a Nonemployee Director who is elected for the first time to serve
as a Nonemployee Director later than the first day of a Plan Year may make a
Deferral Election for such Plan Year within 30 days after such election to the
Board. All Deferral Elections must be made in accordance with procedures
prescribed by the Committee. Any Deferral Election shall apply only to the
Annual Retainer earned or the Restricted Stock Awards granted in the Plan Year
for which the Deferral Election is made. In no event shall a Deferral Election
under the Plan apply to the Annual Retainer payable or the Restricted Stock
Awards granted to the Nonemployee Director with respect to the period prior to
the date on which such election is received by the Company.

Section 4.3. Changes in Deferral Election. A Nonemployee Director must make a
new Deferral Election with respect to each Plan Year by submitting a new
election prior to the first day of such Plan Year in accordance with
Section 4.2. A Nonemployee Director may elect to suspend his or her Deferrals
during a Plan Year only if the Nonemployee Director demonstrates to the
satisfaction of the Committee that he or she has incurred an Unforeseeable
Emergency. No other changes may be made during a Plan Year to a Nonemployee
Director’s Deferral Election.

Section 4.4. Effect of Deferral Election. The submission of an election form
pursuant to Section 4.2 shall evidence the Nonemployee Director’s authorization
of the Company to withhold the payment of the Annual Retainer otherwise payable
to the Nonemployee Director or the shares of Common Stock otherwise issued to
the Nonemployee Director upon the vesting of a Restricted Stock Award, to the
extent such Annual Retainer or Restricted Stock Award is deferred pursuant to
such election, and to credit such amounts to the Nonemployee Director’s Deferral
Account in accordance with Article V.

 

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ARTICLE V

Deferral Accounts

Section 5.1. Deferral Account. As of each date on which a Nonemployee Director
otherwise would be entitled to receive payment of an Annual Retainer from the
Company, the Nonemployee Director’s Deferral Account under the Plan shall be
credited with a number of Share Units determined by dividing the amount of such
Annual Retainer that has been deferred pursuant to Article IV by the Fair Market
Value of a share of Common Stock as of such date. As of each date on which a
Nonemployee Director otherwise would be entitled to receive shares of Common
Stock upon the vesting of a Restricted Stock Award, the Nonemployee Director’s
Deferral Account under the Plan shall be credited with a number of Share Units
equal to the number of shares of Common Stock that have been deferred pursuant
to Article IV. A Nonemployee Director shall be fully vested in all amounts
credited to his or her Deferral Account.

Section 5.2. Dividend Equivalents. Upon the payment of a dividend by the Company
on issued and outstanding shares of Common Stock, an amount equal to such per
share dividend amount multiplied by the number of Share Units credited to each
Nonemployee Director’s Deferral Account shall be credited to the Nonemployee
Director’s Deferral Account within 10 days after the dividend payment date and
shall be deemed invested in additional Share Units as though such dividend
credit was a Deferral for such year.

Section 5.3. Alternative Investment Funds. If shares of Common Stock shall at
any time cease to be traded on an established stock exchange or national market
system, the Committee, in its sole discretion, may transfer the Fair Market
Value of the Share Units accumulated in each Nonemployee Director’s Deferral
Account to alternative investment funds maintained for the benefit of such
Nonemployee Director, as the Committee deems appropriate.

ARTICLE VI

Payment of Deferral Accounts

Section 6.1. Time and Method of Payment. A Nonemployee Director shall make an
election at the same time he or she files a Deferral Election for a Plan Year to
have amounts credited to his or her Deferral Account with respect to such
Deferrals for such Plan Year, including all dividend equivalents pursuant to
Section 5.2 and other earnings pursuant to Section 5.3, distributed:

(a) upon the Nonemployee Director’s Separation Date; or

(b) upon the earlier to occur of (i) the Nonemployee Director’s Separation Date;
and (ii) the first day of any Plan Year which is at least three years after the
first day of the Plan Year for which the Deferral Election is being made (the
“Distribution Date”).

Except as otherwise specifically provided herein, amounts credited to a
Nonemployee Director’s Deferral Account with respect to each Deferral, including
all dividend equivalents pursuant to Section 5.2 and other earnings pursuant to
Section 5.3, shall be paid to such Nonemployee Director in a single lump sum
payment as soon as administratively practicable after the Nonemployee Director’s
Distribution Date with respect to such Deferral, but in no event later than 90
days thereafter. For the avoidance of doubt, if a Nonemployee Director elects a
Distribution Date for one or more Deferrals other than his or her Separation
Date, and if the Nonemployee Director’s Separation Date occurs prior to such
date(s) elected by the Nonemployee Director, the Distribution Date for all such
Deferrals shall be the Nonemployee Director’s Separation Date.

 

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Section 6.2. Change in Payment Election. If a Nonemployee Director elects a
Distribution Date for one or more Deferrals other than his or her Separation
Date, such Nonemployee Director may elect in accordance with procedures
prescribed by the Committee to change such Distribution Date; provided, that,
subject to Section 409A of the Code, such new election shall not be effective
unless it (i) is received by the Company at least one year prior to the
previously scheduled Distribution Date; (ii) does not take effect for 12 months
after it is received by the Company; and (iii) extends the Distribution Date by
at least five years; and provided, further, that if the Nonemployee Director’s
Separation Date occurs prior to the date elected by the Nonemployee Director,
the Distribution Date shall be the Nonemployee Director’s Separation Date.

Section 6.3. Form of Payment. To the extent Restricted Stock Awards were
deferred, a Nonemployee Director’s Deferral Account shall be paid to the
Nonemployee Director in the form of whole shares of Common Stock equal to the
number of whole shares of Common Stock originally deferred. The remaining value
of the Deferral Account, calculated as the Fair Market Value of the Share Units
credited to the Deferral Account less the Fair Market Value of any whole shares
of Common Stock delivered in accordance with the first sentence of this Section,
shall be paid in the form of cash.

Section 6.4. Unforeseeable Emergency. In the event of an Unforeseeable
Emergency, a Nonemployee Director may file a written request with the Committee
to receive all or any portion of the vested balance of such Nonemployee
Director’s Deferral Account in an immediate lump sum cash payment. A Nonemployee
Director’s written request for such a payment shall describe the circumstances
which the Nonemployee Director believes justify the payment and an estimate of
the amount necessary to eliminate the Unforeseeable Emergency. An immediate
payment to satisfy an Unforeseeable Emergency will be made only to the extent
necessary to satisfy the emergency need, plus an amount necessary to pay any
taxes reasonably anticipated as a result of such payment, and will not be made
to the extent the need is or may be relieved through reimbursement or
compensation, by insurance or otherwise or by liquidation of the Nonemployee
Director’s assets (to the extent such liquidation itself would not cause severe
financial hardship). Any payment from a Nonemployee Director’s Deferral Account
on account of an Unforeseeable Emergency shall be deemed to cancel any Deferral
Election of the Nonemployee Director then in effect and the Nonemployee Director
shall be suspended from making further Deferral Elections under the Plan for the
remainder of the Plan Year in which such payment is made.

Section 6.5. Distributions to Minor and Incompetent Persons. If a payment is to
be made to a minor or to an individual who, in the opinion of the Committee, is
unable to manage his or her financial affairs by reason of illness or mental
incompetency, such distribution may be made to or for the benefit of any such
individual in such of the following ways as the Committee shall direct:
(a) directly to any such minor individual if, in the opinion of the Committee,
he or she is able to manage his or her financial affairs, (b) to the legal
representative of any such individual, (c) to a custodian under a Uniform Gifts
to Minors Act for any such minor individual or (d) to some near relative of any
such individual to be used for the latter’s benefit. Neither the Committee nor
the Company shall be required to see to the application by any third party of
any payment made to or for the benefit of a Nonemployee Director or beneficiary
pursuant to this Section.

 

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ARTICLE VII

Payment Upon Death of a Nonemployee Director

Section 7.1. Payment to Beneficiary. In the event a Nonemployee Director dies
before all amounts credited to his or her Deferral Account have been paid,
payment of the Nonemployee Director’s Deferral Account shall be made in a lump
sum payment as soon as practicable, but not later than 90 days, after the date
of such death.

Section 7.2. Designation of Beneficiary. Each Nonemployee Director may file with
the Company a written designation of one or more persons as such Nonemployee
Director’s beneficiary or beneficiaries (both primary and contingent) in the
event of the Nonemployee Director’s death. Each beneficiary designation shall
become effective only when filed in writing with the Company during the
Nonemployee Director’s lifetime on a form prescribed by the Company. The filing
with the Company of a new beneficiary designation shall cancel all previously
filed beneficiary designations. If a Nonemployee Director fails to designate a
beneficiary, or if all designated beneficiaries of a Nonemployee Director
predecease the Nonemployee Director, then the Deferral Account shall be paid to
the Nonemployee Director’s estate.

ARTICLE VIII

Funding

Benefits payable under the Plan to any Nonemployee Director shall be paid by the
Company. The Company shall not be required to fund, or otherwise segregate
assets to be used for payment of benefits under the Plan. Notwithstanding the
foregoing, the Company, in the discretion of the Committee, may maintain one or
more grantor trusts (each, a “Trust”) to hold assets to be used for payment of
benefits under the Plan. The assets of the Trust shall remain the assets of the
Company subject to the claims of its general creditors. Any payments by a Trust
of benefits provided to a Nonemployee Director under the Plan shall be
considered payment by the Company and shall discharge the Company of any further
liability under the Plan for such payments.

ARTICLE IX

General

Section 9.1. Effective Date; Termination. This Plan shall be effective as of the
Effective Date. The Committee may terminate this Plan at any time. Termination
of this Plan shall not affect the payment of any amounts credited to a
Nonemployee Director’s Deferral Account; provided, that the Board may, in its
discretion, terminate the Plan and accelerate the payment of all Deferral
Accounts:

(a) within 12 months of a corporate dissolution taxed under Section 331 of the
Code, or with the approval of a bankruptcy court pursuant to 11 U.S.C.
§503(b)(1)(A), provided that the payments with respect to each such Deferral
Account are included in the Nonemployee Director’s gross income in the later of
(i) the calendar year in which the Plan termination occurs or (ii) the first
calendar year in which the payments are administratively practicable;

 

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(b) in connection with a “change in control event,” as defined in, and to the
extent permitted under, Treasury regulations promulgated under Section 409A of
the Code; or

(c) upon any other termination event permitted under Section 409A of the Code.

Section 9.2. Amendments. The Committee may amend this Plan as it shall deem
advisable. No amendment may impair the rights of a Nonemployee Director to
payment of his or her Deferral Account without the consent of such Nonemployee
Director.

Section 9.3. Nontransferability of Benefits. No benefit payable at any time
under the Plan shall be subject in any manner to alienation, sale, transfer,
assignment, pledge, attachment, or other legal process, or encumbrance of any
kind. Any attempt to alienate, sell, transfer, assign, pledge or otherwise
encumber any such benefits, whether currently or thereafter payable, shall be
void. No person shall, in any manner, be liable for or subject to the debts or
liabilities of any person entitled to such benefits. If any person shall attempt
to, or shall alienate, sell, transfer, assign, pledge or otherwise encumber his
benefits under the Plan, or if by any reason of his bankruptcy or other event
happening at any time, such benefits would devolve upon any other person or
would not be enjoyed by the person entitled thereto under the Plan, then the
Committee, in its discretion, may terminate the interest in any such benefits of
the person entitled thereto under the Plan and hold or apply them for or to the
benefit of such person entitled thereto under the Plan or his spouse, children
or other dependents, or any of them, in such manner as the Committee may deem
proper.

Section 9.4. Adjustment. In the event of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination, exchange
of shares, liquidation, spin-off or other similar change in capitalization or
event, or any distribution to holders of Common Stock other than a regular cash
dividend, the number of Share Units credited to each Deferral Account under the
Plan shall be appropriately adjusted by the Committee. The decision of the
Committee regarding any such adjustment shall be final, binding and conclusive.

Section 9.5. Forfeitures and Unclaimed Amounts. Unclaimed amounts shall consist
of the amounts of the Deferral Account of a Nonemployee Director that are not
distributed because of the Company’s inability, after a reasonable search, to
locate a Nonemployee Director or his or her beneficiary, as applicable, within a
period of two (2) years after the distribution date upon which the payment of
any benefits becomes due. Unclaimed amounts shall be forfeited at the end of
such two-year period. These forfeitures will reduce the obligations of the
Company under the Plan and the Nonemployee Director or beneficiary, as
applicable, shall have no further right to his or her Deferral Account.

 

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Section 9.6. Compliance With Section 409A of Code. This Plan is intended to
comply with the provisions of Section 409A of the Code, and shall be interpreted
and construed accordingly. The Committee shall have the discretion and authority
to amend the Plan at any time to satisfy any requirements of Section 409A of the
Code or guidance provided by the U.S. Treasury Department to the extent
applicable to the Plan. Notwithstanding any other provision in this Plan, if as
of a Nonemployee Director’s Separation Date the Nonemployee Director is a
“specified employee,” as defined in Section 409A of the Code, then to the extent
any amount under this Plan is payable upon such Separation Date, such payment
shall be delayed until the earlier to occur of (i) the six-month anniversary of
such Separation Date or (ii) the date of such Nonemployee Director’s death.

Section 9.7. Governing Law. This Plan and all determinations made and actions
taken pursuant thereto shall be governed by the laws of the State of Delaware
and construed in accordance therewith without giving effect to principles of
conflicts of laws.

 

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