FILED PURSUANT TO RULE 424(B)(3)
WITH RESPECT TO REGISTRATION NO. 333-74564
PROSPECTUS
170,000 Shares
[COMPANY LOGO]
HILB, ROGAL AND HAMILTON COMPANY
Common Stock
This Prospectus relates to 170,000 shares (the "Shares") of the Common
Stock, no par value (the "Common Stock"), of Hilb, Rogal and Hamilton Company, a
Virginia corporation (the "Company"). The Shares of Common Stock to be sold by
the selling shareholders (the "Selling Shareholders"), identified in this
Prospectus under the caption "Selling Shareholders," were acquired pursuant to
the terms of the Hilb, Rogal and Hamilton Company Executive Voluntary Deferral
Plan, as amended and restated (the "Executive Plan"), and the Hilb, Rogal and
Hamilton Company Outside Directors Deferral Plan, as amended and restated (the
"Directors Plan"), as applicable. See "Selling Shareholders." The Shares will be
offered and sold by the Selling Shareholders from time to time. The Company will
not receive any part of the proceeds from the sale of the Shares.
The Selling Shareholders may sell all or any portion of the Shares for
their own accounts from time to time in one or more transactions through brokers
or dealers at market prices then prevailing, in underwritten transactions at
prices related to then-current market prices or in individually negotiated
transactions at such prices as may be agreed upon. See "Plan of Distribution."
The Company will pay all expenses in connection with the registration
of the Shares under the Securities Act of 1933, as amended (the "Securities
Act"), including the preparation of this Prospectus. See "Plan of Distribution."
See "Risk Factors" beginning on page 4 for a discussion of certain
factors that should be considered in connection with an investment in the
Shares.
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The Common Stock is listed on the New York Stock Exchange under the
symbol "HRH." On February 7, 2002, the closing sales price of the Common Stock
as reported on the New York Stock Exchange Composite Tape was $37.38 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is February 13, 2002.
ABOUT THIS PROSPECTUS
This Prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission (the "Commission") using a "shelf"
registration process. Under this shelf process, the Selling Shareholders may
offer from time to time the securities described in this Prospectus in one or
more offerings up to a total share amount of 170,000 shares. This Prospectus
provides you with a general description of our Company and those securities. In
the future, we may provide you with a prospectus supplement which may add,
update or change information contained in this Prospectus. You should read this
Prospectus and any applicable prospectus supplement together with the additional
information described under the heading "Available Information."
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance with
the Exchange Act we file reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information filed by us
can be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549-1004, and at the following Regional Offices of the Commission: New
York Regional Office, 233 Broadway, New York, New York 10279 and Chicago
Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such materials can also be obtained by mail from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549-1004, at prescribed rates. The Commission maintains a Web
site (http://www.sec.gov) that contains reports, proxy statements and other
information regarding registrants, such as us, that file electronically with the
Commission. The Common Stock is listed on the New York Stock Exchange (the
"NYSE"), and such reports, proxy statements and other information relating to us
can also be inspected at the offices of the NYSE, 20 Broad Street, New York, New
York 10005.
This Prospectus constitutes a part of a registration statement on Form
S-3 (the "Registration Statement") filed by us with the Commission under the
Securities Act. As permitted by the rules and regulations of the Commission,
this Prospectus omits certain information contained in the Registration
Statement. For further information, reference is hereby made to the Registration
Statement and to the exhibits thereto, which may be inspected and copied in the
manner and at the locations described above. Statements contained in this
Prospectus concerning provisions of any document filed as an exhibit to the
Registration Statement, incorporated by reference into this Prospectus or
otherwise filed with the Commission are not necessarily complete, and each such
statement is qualified in its entirety by reference to the copy of such document
filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following reports and other documents previously filed by us with
the Commission under the Exchange Act are incorporated by reference into this
Prospectus:
(a) our Annual Report on Form 10-K for the year ended December 31, 2000
(the "Form 10-K");
(b) the portions of our Proxy Statement for the Annual Meeting of
Shareholders held on May 1, 2001 that have been incorporated by reference into
the Form 10-K;
(c) our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2001, June 30, 2001 and September 30, 2001;
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(d) our Current Report on Form 8-K filed June 11, 2001; and
(e) the description of our Common Stock contained in our Current Report
on Form 8-K filed on January 23, 2001.
All reports and other documents we filed pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering contemplated by this Prospectus shall
be deemed to be incorporated by reference into this Prospectus and to be a part
of it from the date of filing of such reports and other documents. Any statement
contained in this Prospectus or in a report or document incorporated or deemed
to be incorporated by reference into this Prospectus shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained in this Prospectus (or in any other subsequently filed
document that also is incorporated or deemed to be incorporated by reference
into this Prospectus) modifies or supersedes such previous statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
We will provide, without charge, to each person to whom this Prospectus
is delivered, on that person's written or oral request, a copy of any or all of
the foregoing documents incorporated by reference into this Prospectus (other
than certain exhibits to such documents). Requests for such copies should be
directed to Walter L. Smith, Esquire, Senior Vice President, General Counsel and
Secretary, Hilb, Rogal and Hamilton Company, 4951 Lake Brook Drive, Suite 500,
Glen Allen, Virginia 23060, telephone number (804) 747-6500.
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
We caution you that this Prospectus includes "forward-looking
statements" within the meaning of the private Securities Litigation Reform Act
of 1995 and is subject to the safe harbor created by those acts. Among other
things, these statements relate to our financial condition, results of operation
and business. These forward-looking statements are generally identified by the
words or phrases "would be," "will allow," "expects to," "will continue," "is
anticipated," "estimate," "project" or similar expressions.
While we provide forward-looking statements to assist in the
understanding of our anticipated future financial performance, we caution
readers not to place undue reliance on any forward-looking statements which
speak only as of the date that we make them. Forward-looking statements are
subject to significant risks and uncertainties, many of which are beyond our
control. Although we believe that the assumptions underlying our forward-looking
statements are reasonable, any of the assumptions could prove to be inaccurate.
Actual results may differ materially from those contained in or implied by these
forward-looking statements for a variety of reasons.
We have included risk factors and uncertainties that might cause such a
difference in the "Risk Factors" section of this Prospectus on page 4.
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RISK FACTORS
Before you invest in our Common Stock, you should be aware of various
risks, including the risks described below. You should carefully consider these
risk factors, together with all of the other information included in this
Prospectus, before you decide whether to purchase shares of our Common Stock.
Because our commission revenues are based on premiums set by insurers, any
decreases in these premium rates will result directly in revenue decreases for
us
We are engaged in insurance agency and brokerage activities and derive
revenues primarily from commissions on the sale of insurance products to clients
that are paid by the insurance underwriters with whom our subsidiary agencies
place their clients' insurance. These commissions are based on the premiums that
the insurance underwriters charge, and we do not determine insurance premium
rates. In addition, these premiums historically have been cyclical in nature and
have displayed a high degree of volatility based on the prevailing economic and
competitive factors that affect insurance underwriters. These factors, which are
not within our control, include the capacity of insurance underwriters to place
new business, non-underwriting profits of insurance underwriters, consumer
demand for insurance products, the availability of comparable products from
other insurance underwriters at a lower cost and the availability of alternative
insurance products, such as government benefits and self-insurance plans, to
consumers.
We cannot predict the timing or extent of future changes in premiums
and thus commissions. As a result, we cannot predict the effect that future
premium rates would have on our operations. While increases in premium rates
will result directly in revenue increases for us, decreases in premium rates,
however, will result directly in revenue decreases for us. These decreases may
adversely affect our results of operations for the periods in which they occur.
Carrier override and contingent commissions are less predictable than usual, and
any decreases in our collection of them may have an impact on our operating
results that we are unable to anticipate
We derive a portion of our revenues from carrier override and
contingent commissions based upon the terms of the contractual relationships
between the insurance underwriters and our subsidiary agencies. Carrier override
commissions are commissions paid by insurance underwriters in excess of the
standard commission rates on specific classes of business. These amounts are not
contingent on achieving a specific premium volume or profitability of the
business. Contingent commissions are commissions paid by insurance underwriters
and are based on the estimated profit that the underwriter makes on the overall
volume of business that we place with it. We generally receive these commissions
in the first and second quarters of each year. In the aggregate, these
commissions generally account for 5% to 10% of our total revenues.
Due to recent changes in our industry, we cannot predict the payment of
these commissions as well as we have been able to in the past. One of these
changes, the high loss ratios experienced by insurance carriers, has resulted in
a decreased profit to them and may result in decreases in the payment of
contingent commissions to us. Furthermore, we have no control over insurance
carriers' ability to estimate loss reserves, which affects our profit-sharing
calculation. Another change, the tightening of underwriting criteria by certain
insurance underwriters, due in part to the high loss ratios, may result in a
lower volume of business that we are able to place with them. Carrier override
and contingent commissions affect our revenues, and decreases in their payment
to us may have an adverse effect on our results of operations.
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Our continued growth will be enhanced through acquisitions of insurance
agencies, but we may not be able successfully to identify suitable acquisition
candidates
Our strategic plan focuses on the regular and systematic evaluation and
acquisition of insurance agencies and, between 1984 and the date of this
Prospectus, we have acquired approximately 190 independent agencies. While we
generally expect our revenues to increase over time from internal growth,
acquisitions directly enhance our revenue growth.
There can be no assurance, however, that we will be able successfully
to identify suitable acquisition candidates that will permit us to expand into
new or existing markets. We are unable to predict whether or when any
prospective acquisition candidates will become available or the likelihood that
any acquisition will be completed once negotiations have commenced. We compete
for acquisition and expansion opportunities with entities that have
substantially greater resources. The failure to acquire additional agencies at
the same level that we have in the past may affect the expected growth in our
operating revenues.
Once we acquire an insurance agency, any failure by us to complete the
acquisition and integrate the agency successfully may have an adverse effect on
our operations
The integration of an acquisition may involve a number of factors that
may affect our operations. These factors include diversion of management's
attention, difficulties in the integration of acquired operations and retention
of personnel, entry into unfamiliar markets, unanticipated problems or legal
liabilities, and tax and accounting issues. Furthermore, once we have integrated
an acquired insurance agency initially, the agency may not achieve levels of
revenue, profitability, or productivity comparable to our existing locations, or
otherwise perform as expected. The failure to integrate one or more acquired
agencies so that they achieve these performance goals may have a material
adverse effect on our results of operations and financial condition.
The general level of economic activity can have an impact on our business that
is difficult to predict; a strong economic period may not necessarily result in
higher revenues for us
The volume of insurance business available to our agencies has
historically been influenced by factors such as the health of the overall
economy. The specific impact of the health of the economy on our revenues,
however, can be difficult to predict. When the economy is strong, insurance
coverages typically increase as payrolls, inventories and other insured risks
increase. Insurance commissions to our agencies generally would be expected to
increase. As discussed above, however, our commission revenues are dependent on
premium rates charged by insurers, and these rates are subject to fluctuation
based on prevailing economic and competitive conditions. As a result, the higher
commission revenues our company generally would expect to see in a strong
economic period may not necessarily occur, as any increase in the volume of
insurance business brought about by favorable economic conditions may be offset
by premium rates that have declined in response to increased competitive
conditions, among other factors.
If we are unable to respond in a timely and cost-effective manner to rapid
technological change in our industry, there may be a resulting adverse effect on
our business and operating results
The insurance industry is becoming increasingly influenced by rapid
technological change, frequent new product and service introductions and
evolving industry standards. For example, the insurance brokerage industry has
increased use of the Internet to communicate benefits and related information to
consumers and to facilitate business-to-business information exchange and
transactions. We believe that we have responded to these changes in the industry
quickly and in a timely manner. We
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actively explore the opportunities that information technology affords the
insurance brokerage industry and, in particular, the operations of our agencies.
We have specifically expanded our in-house information technology staff and
collaborated on a web-based distribution channel with Workplus.com.
We believe that our future success will depend on our ability to
continue to anticipate technological changes and to offer additional product and
service opportunities that meet evolving standards on a timely and
cost-effective basis. In the three years prior to this Prospectus, we spent
almost $11.0 million on computer software and hardware. We believe that the
development and implementation of new technologies will require additional
investment of our capital resources in the future. We have not determined,
however, the amount of resources and the time that this development and
implementation may require. There is a risk that we may not successfully
identify new product and service opportunities or develop and introduce these
opportunities in a timely and cost-effective manner. In addition, opportunities
that our competitors develop or introduce may render our products and services
noncompetitive. As a result, we can give no assurances that technological
changes that may affect our industry in the future will not have a material
adverse effect on our business and operating results.
Quarterly and annual variations in our commissions that result from the timing
of policy renewals and the net effect of new and lost business production may
have unexpected impacts on our results of operations
Our commission income, which typically accounts for approximately 89%
to 91% of our total annual revenues, is subject to both quarterly and annual
fluctuations as a result of the timing of policy renewals and the net effect of
new and lost business production. The factors that cause these fluctuations are
not within our control. Specifically, consumer demand for insurance products can
influence the timing of renewals, new business and lost business, which includes
generally policies that are not renewed and cancellations. In addition, we rely
on insurance underwriters for the payment of certain commissions. Due to
internal processing of payments by these underwriters, we may not receive a
payment that is otherwise expected from a particular underwriter in one of our
quarters or years until after the end of that period.
We generally expect, however, our revenues to increase with new
business and to decrease with lost business. The extent of quarterly and annual
fluctuations based on these increases and decreases, and the increases and
decreases that may be associated with policy renewals, may be difficult to
predict for any period.
THE COMPANY
We serve as an intermediary between our clients and insurance companies
that underwrite client risks. Our clients are traditionally middle-market
businesses, which are generally businesses that do not have internal risk
management departments and outsource that function to us or to one of our
competitors. Through our network of subsidiary insurance agencies, we assist
clients in managing their risks in areas such as property and casualty, employee
benefits and other areas of specialized exposure. As of the date of this
Prospectus, these agencies operate approximately 84 offices in 23 states. Our
client base ranges from personal to large national accounts and is primarily
comprised of middle-market commercial and industrial accounts. Insurance
commissions have typically accounted for approximately 89% to 91% of our total
annual revenues. We also advise clients on risk management and employee benefits
and provide claims administration and loss control consulting services to
clients, which have contributed approximately 6% to 8% of annual revenues.
We have historically grown principally through acquisitions of
independent insurance agencies with significant local market shares in small to
medium-size metropolitan areas. Between 1984 and the
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date of this Prospectus, we have acquired approximately 196 independent
agencies. Our prior growth strategy emphasized acquisitions of established
independent agencies staffed by local professionals and centralization of
certain administrative functions to allow agents to focus on business
production. We believe that a key to our success has been a strong emphasis on
local client service by experienced personnel with established community
relationships.
Our current acquisition program is largely focused on acquisitions that
fit into our current operating models and strategic plans and targets entities
that strengthen our regions and middle-market position or add to our specialty
lines of business and increase our range of services.
In addition, we are actively exploring the opportunities that
information technology affords the insurance brokerage industry and, in
particular, the operations of our agencies. We have expanded our in-house
information technology staff to oversee the role of the Internet, innovative
networking and e-commerce in making our client service capabilities more
effective and efficient. We have also collaborated on a web-based distribution
channel that enables companies to distribute information relating to benefits,
training and other material to their employees and to provide them with
information and links for selected vendors of financial services, including
insurance, in a cost-effective manner.
The agencies act as independent agents representing a large number of
insurance companies, which gives us access to specialized products and capacity
needed by our clients. Agencies and regions are staffed to handle the broad
variety of insurance needs of their clients. Additionally, certain agencies and
regions have developed special expertise in areas such as aviation, construction
and marine insurance services, and this expertise is made available to clients
throughout the regions and our network.
Our corporate headquarters are located at 4951 Lake Brook Drive, Suite
500, in Glen Allen, Virginia 23060, and our telephone number is (804) 747-6500.
USE OF PROCEEDS
All of the Shares covered by this Prospectus are being offered by the
Selling Shareholders. As a consequence, we will not receive any of the proceeds
from the sale of any of the Shares. We will pay all expenses in connection with
the registration of the Shares under the Securities Act, including the
preparation of this Prospectus.
THE SELLING SHAREHOLDERS
The following table sets forth certain information regarding each
Selling Shareholder, the number of Shares of Common Stock beneficially owned by
each Selling Shareholder as of November 28, 2001 and the number of Shares being
offered by each Selling Shareholder. The Shares being offered by the Selling
Shareholders represent Shares of Common Stock that will be paid to the Selling
Shareholders at various times in the future with respect to deferred
compensation obligations under the Executive Plan and the Directors Plan, as
applicable. The deferred compensation obligations relate to certain Deferred
Stock Units credited under the Executive Plan and the Directors Plan prior to
January 1, 2002, and any additional Deferred Stock Units credited as a result of
dividends on such Deferred Stock Units.
The Selling Shareholders may offer all or part of their Shares for
resale from time to time. However, the Selling Shareholders are under no
obligation to sell all or any portion of their Shares immediately under this
Prospectus. Unless otherwise indicated below, the address for each Selling
Shareholder shall be our address: Hilb, Rogal and Hamilton Company, 4951 Lake
Brook Drive, Suite 500, Glen Allen, Virginia 23060.
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Name of Shareholder and Title/Position Number of Shares Beneficially Number of Shares to be
Held Within Past Three Years(1) Owned Before the Offering(2)(3) Sold in the Offering(4)
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Hobbs, David 1,420 5,934
Hilb Rogal and Hamilton Company of Alabama,
Inc.
President (since 7/31/00)
Executive Vice President (7/1/99 to
7/31/00)
Goforth, Rene 15,588 422
Hilb, Rogal and Hamilton Company of Victoria
President
Janes, Michael 37,864 932
Hilb, Rogal and Hamilton Company
Vice President-Regional Director
Vaughan, Martin 293,448 10,236
Hilb, Rogal and Hamilton Company
President & Chief Operating Officer
Zaiger, Ronald 3,822 1,850
Hilb, Rogal and Hamilton Insurance Agency
of Massachusetts, LLC
President (since 7/1/99)
Manke, Karl 17,414 5,634
Hilb, Rogal and Hamilton Company
Vice President
Gorham, Brian - 176
Hilb, Rogal and Hamilton Insurance Services of
Central California, Inc.
Chairman (since 1/1/01)
President
Tanner, Van 2,090 276
HRH Insurance Services of the Coachella
Valley, Inc.
President
Teachout, Scot 2,366 1,492
Hilb, Rogal and Hamilton Company of
Pittsburgh, LLC
President
Sylvester, David 1,436 1,102
Hilb, Rogal and Hamilton Company of Tampa Bay,
Inc.
President (since 8/13/99)
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Renneker, Frederick 6,500 1,378
Hilb, Rogal and Hamilton Company of Alabama,
Inc.
Chairman (since 7/31/00)
President (1/1/98 to 6/30/00)
Tyler, Benjamin 18,556 6,374
Hilb, Rogal and Hamilton Company
Vice President-Regional Director
Parrett, James 6,470 266
HRH of Northern California Insurance Services,
Inc.
President (since 11/18/99)
Manager (1/1/98 to 11/17/99)
McGillicuddy, Kim 1,326 3,876
Hilb, Rogal and Hamilton Company of Connecticut
President (since 9/7/99)
Dartois, Leon 10,000 2,538
Hilb, Rogal and Hamilton Company of Denver
President
Lockhart, Robert 40,264 9,098
Hilb, Rogal and Hamilton Company
Vice President-Regional Director
Brantlinger, Herbert 168 536
The Managing Agency, Inc.
President (since 7/1/99)
Hilb, Robert H. 174,000 12,670
Hilb, Rogal and Hamilton Company
Director
Davis, Norwood H., Jr. 20,000 1,946
Hilb, Rogal and Hamilton Company
Director
Chandler, Theodore L., Jr. 27,900 13,186
Hilb, Rogal and Hamilton Company
Director
Ukrop, Robert S. 41,296 10,398
Hilb, Rogal and Hamilton
Director
Smith, Julious P., Jr. 2,000 1,150
Hilb, Rogal and Hamilton Company
Director
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Searfoss, David W. 1,732,084 5,964
Hilb, Rogal and Hamilton Company
Director
Markel, Anthony F. 14,000 10,424
Hilb, Rogal and Hamilton Company
Director
French, J.S.M. 86,600 10,870
Hilb, Rogal and Hamilton Company
Director
Fiondella, Robert W. 1,740,084 5,788
Hilb, Rogal and Hamilton Company
Director
(1) Titles and positions have been held for at least the past three years
unless otherwise noted.
(2) Beneficial ownership is determined in compliance with the rules of the
Commission and generally includes voting or investment power with respect to
the Shares and includes any Shares which the person had the right to acquire
within 60 days of November 28, 2001, through the conversion or exercise of any
security or any right.
(3) Share amounts have been adjusted to reflect a two-for-one stock split
effected on December 31, 2001.
(4) Based on the number of Deferred Stock Units held by the participants
as of November 28, 2001 that are payable to the participants in shares of
Common Stock. Does not include an unknown number of additional Shares which the
Selling Shareholders may receive as a result of dividends on Deferred Stock
Units held under the Executive Plan or the Directors Plan. However, this
Prospectus coversan aggregate of 45,484 additional Shares which the Selling
Shareholders may receive as a result of such dividends.
PLAN OF DISTRIBUTION
We have no specific information concerning whether or when any offers
or sales of Shares covered by this Prospectus will be made, or if made,
concerning the price, terms or conditions of any such offers or sales. Each
Selling Shareholder and its agents and representatives may, from time to time,
offer and sell the Shares by one or more of the following methods: (i) ordinary
brokerage transactions on the New York Stock Exchange by one or more brokers
acting as agent for the Selling Shareholder, at a price or prices related to the
then current market price of the Common Stock, with such commissions to be paid
by the Selling Shareholder to the broker as shall be agreed upon by them; (ii)
with our prior written consent, underwritten transactions or purchases by a
broker or dealer as principal and resale by such broker or dealer for its own
account at a price or prices related to the then current market price of the
Common Stock, less such discount, if any, as shall be agreed upon by the Selling
Shareholder and such broker or dealer; (iii) by a combination of the methods
described above; or (iv) in privately negotiated transactions. Sales of the
Shares may also be made pursuant to Rule 144 under the Securities Act, where
applicable. The underwriters in an underwritten offering, if any, and the terms
and conditions of any such offering will be described in a supplement to this
Prospectus.
In connection with the distribution of the Shares, a Selling
Shareholder may enter into hedging or other option transactions with
broker-dealers in connection with which, among other things, such broker-dealers
may engage in short sales of the Shares pursuant to this Prospectus in the
course of hedging the positions they may assume with a Selling Shareholder. A
Selling Shareholder may also sell Shares short
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pursuant to this Prospectus and deliver the Shares to close out such short
positions. A Selling Shareholder may also enter into option or other
transactions with broker-dealers which may result in the delivery of Shares to
such broker-dealers which may sell such Shares pursuant to this Prospectus. A
Selling Shareholder may also pledge the Shares to a broker-dealer or financial
institution and upon default the broker-dealer or financial institution may
effect the sales of the pledged Shares pursuant to this Prospectus.
There is no assurance that the Selling Shareholders will sell any or
all of the Shares described herein and may transfer, devise or gift such
securities by other means not described herein.
DESCRIPTION OF CAPITAL STOCK
The following is a description of our capital stock. This description
is qualified in its entirety by reference to applicable provisions of Virginia
law and our Articles of Incorporation and Amended and Restated Bylaws, the
complete text of which are on file with the Commission and incorporated herein
by reference.
Common Stock
As of the date of this Prospectus, we have authorized capital stock
consisting of 50,000,000 shares of Common Stock, no par value. The holder of
each share of Common Stock is entitled to one vote per share. Each share of
Common Stock shares ratably with respect to dividends and upon liquidation. The
shares of Common Stock are not redeemable, have no conversion rights and carry
no preemptive or other rights to subscribe to additional shares of Common Stock
or to securities convertible into Common Stock.
The Common Stock does not have cumulative voting rights, which means
that the holders of a majority of the shares voting for the election of the
class of directors subject to election at that meeting can elect all of the
directors comprising that class, and in such event holders of the remaining
minority of shares so voting will not be able to elect any member of that class
of the Board of Directors.
Certain Provisions of our Charter and Bylaws
Our Articles of Incorporation provide that the Board of Directors is
divided into three classes having staggered three-year terms. This provision
could have the effect of making it more difficult for a third party to acquire
control of the Board of Directors or of discouraging a third party from
attempting to acquire a majority of our outstanding voting stock.
Affiliated Transactions
The Virginia Stock Corporation Act contains provisions governing
"Affiliated Transactions." Affiliated Transactions include certain mergers and
share exchanges, material dispositions of corporate assets not in the ordinary
course of business, any dissolution of the corporation proposed by or on behalf
of an Interested Shareholder (as defined below), or reclassifications, including
reverse stock splits, recapitalizations or mergers of the corporation with its
subsidiaries which have the effect of increasing the percentage of voting shares
beneficially owned by an Interested Shareholder by more than 5%. For purposes of
the Act, an "Interested Shareholder" is defined as any beneficial owner of more
than 10% of any class of the voting securities of a Virginia corporation.
Subject to certain exceptions discussed below, the provisions governing
Affiliated Transactions require that, for three years following the date upon
which any shareholder becomes an Interested
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Shareholder, a Virginia corporation cannot engage in an Affiliated Transaction
with such Interested Shareholder unless approved by the affirmative vote of the
holders of two-thirds of the voting shares of the corporation, other than the
shares beneficially owned by the Interested Shareholder, and by a majority (but
not less than two) of the "Disinterested Directors." A Disinterested Director
means, with respect to a particular Interested Shareholder, a member of a
corporation's board of directors who (i) was a member before the later of
January 1, 1988 and the date on which an Interested Shareholder became an
Interested Shareholder and (ii) was recommended for election by, or was elected
to fill a vacancy and received the affirmative vote of, a majority of the
Disinterested Directors then on the board. At the expiration of the three-year
period, these provisions require approval of Affiliated Transactions by the
affirmative vote of the holders of two-thirds of the voting shares of the
corporation, other than those beneficially owned by the Interested Shareholder.
The principal exceptions to the special voting requirement apply to
Affiliated Transactions occurring after the three-year period has expired and
require either that the transaction be approved by a majority of the
Disinterested Directors or that the transaction satisfy certain fair price
requirements of the statute. In general, the fair price requirements provide
that the shareholders must receive the highest per share price for their shares
as was paid by the Interested Shareholder for his shares or the fair market
value of their shares, whichever is higher. They also require that, during the
three years preceding the announcement of the proposed Affiliated Transaction,
all required dividends have been paid and no special financial accommodations
have been accorded the Interested Shareholder unless approved by a majority of
the Disinterested Directors.
None of the foregoing limitations and special voting requirements
applies to an Affiliated Transaction with an Interested Shareholder whose
acquisition of shares making such person an Interested Shareholder was approved
by a majority of the corporation's Disinterested Directors.
These provisions were designed to deter certain takeovers of Virginia
corporations. In addition, the statute provides that, by affirmative vote of a
majority of the voting shares other than shares owned by any Interested
Shareholder, a corporation may adopt, by meeting certain voting requirements, an
amendment to its articles of incorporation or bylaws providing that the
Affiliated Transactions provisions shall not apply to the corporation. We have
not adopted such an amendment.
Control Share Acquisitions
The Virginia Act also contains provisions regulating certain "control
share acquisitions," which are transactions causing the voting strength of any
person acquiring beneficial ownership of shares of a public corporation in
Virginia to meet or exceed certain threshold percentages (20%, 33 1/3% or 50%)
of the total votes entitled to be cast for the election of directors. Shares
acquired in a control share acquisition have no voting rights unless: (i) the
voting rights are granted by a majority vote of all outstanding shares other
than those held by the acquiring person or any officer or employee director of
the corporation, or (ii) the articles of incorporation or bylaws of the
corporation provide that these Virginia law provisions do not apply to
acquisitions of its shares. The acquiring person may require that a special
meeting of the shareholders be held to consider the grant of voting rights to
the shares acquired in the control share acquisition. These provisions were
designed to deter certain takeovers of Virginia public corporations. We have not
adopted an amendment to our Articles of Incorporation or By-laws making these
provisions inapplicable to acquisitions of its shares.
Indemnification of Directors and Officers
Article 10 of Chapter 9 of Title 13.1 of the Code of Virginia (the
"Code") permits a Virginia corporation to indemnify any director or officer for
reasonable expenses incurred in any legal proceeding
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in advance of final disposition of the proceeding, if the director or officer
furnishes the corporation a written statement of his good faith belief that he
or she has met the standard of conduct prescribed by the code, and a
determination is made by the board of directors that such standard has been met.
In a proceeding by or in the right of the corporation, no indemnification shall
be made in respect of any matter as to which an officer or director is adjudged
to be liable to the corporation, unless the court in which the proceeding took
place determines that, despite such liability, such person is reasonably
entitled to indemnification in view of all of the relevant circumstances. In any
other proceeding, no indemnification shall be made if the director or officer is
adjudged liable to the corporation on the basis that he improperly received a
personal benefit. Corporations are given the power to make any other or further
indemnity, including advance of expenses, to any director or officer that may be
authorized by the articles of incorporation or any bylaw made by the
shareholders, or any resolution adopted, before or after the event, by the
shareholders, except an indemnity against willful misconduct or a knowing
violation of the criminal law. Unless limited by its articles of incorporation,
indemnification of a director or officer is mandatory when he or she entirely
prevails in the defense of any proceeding to which he or she is a party because
he or she is or was a director or officer.
Our Articles of Incorporation contain provisions indemnifying our
directors and officers to the full extent permitted by Virginia law. In
addition, our Articles of Incorporation eliminate the personal liability of our
directors and officers to us or our shareholders for monetary damages to the
full extent permitted by Virginia law.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our financial
statements and schedule incorporated by reference or included in our Annual
Report on Form 10-K for the year ended December 31, 2000, as set forth in their
report, which is incorporated by reference in this Prospectus and elsewhere in
the Registration Statement. Our financial statements and schedule are
incorporated by reference in reliance on Ernst & Young LLP's report, given on
their authority as experts in accounting and auditing.
Documents that we have not yet filed and that we have incorporated by
reference into this Prospectus will include financial statements, related
schedules (if required) and auditors' reports. Those financial statements and
schedules will have been audited to the extent and for the periods set forth in
those reports by the firm or firms rendering the reports and, to the extent so
audited and consent to incorporation by reference is given, will be incorporated
by reference in reliance upon those reports given upon the authority of the firm
or firms as experts in accounting and auditing.
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No dealer, salesperson or other person has been
authorized to give any information or to make any
representation other than those contained in this
Prospectus and, if given or made, such information
or representation must not be relied upon as having
been authorized by the Company or any sales agent.
This Prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any securities 170,000 Shares
other than the securities to which it relates, nor does
it constitute an offer to sell or the solicitation of an
offer to buy any of the securities offered hereby in
any jurisdiction in which such offer or solicitation is [COMPANY LOGO]
not authorized, or in which the person making such
offer or solicitation is not qualified to do so, or to
any person to whom it is unlawful to make such
offer or solicitation. Neither the delivery of this HILB, ROGAL AND
Prospectus nor any sale made hereunder shall, HAMILTON COMPANY
under any circumstances, create any implication
that the information contained herein is correct as
of any time subsequent to the date hereof or that
there has been no change in the affairs of the
Company since the date hereof. Common Stock
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TABLE OF CONTENTS
Page __________________
About this Prospectus................................2 PROSPECTUS
Available Information................................2 __________________
Incorporation of Certain Documents
by Reference.......................................2
Forward-Looking and Cautionary Statements............3
Risk Factors.........................................4
The Company..........................................6
Use of Proceeds......................................7
The Selling Shareholders.............................7
Plan of Distribution................................10
Description of Capital Stock........................11
Experts.............................................13 February 13, 2002
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