Document:

TO:

EXHIBIT 10.5

 

 

COMMUNITY

TRUST BANCORP, INC.

SENIOR

MANAGEMENT INCENTIVE

COMPENSATION

PLAN

 

 

EFFECTIVE

JANUARY 1, 2002

 

 

 

SENIOR

MANAGEMENT INCENTIVE COMPENSATION PLAN

TABLE OF

CONTENTS

 

	

  ARTICLE

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  I.

  	

   

  	

  Objectives

  
	

   

  	

   

  	

   

  
	

  II.

  	

   

  	

  Definitions

  
	

   

  	

   

  	

   

  
	

  III.

  	

   

  	

  Administration of the Plan

  
	

   

  	

   

  	

   

  
	

  IV.

  	

   

  	

  Participant Eligibility

  
	

   

  	

   

  	

   

  
	

  V.

  	

   

  	

  Payment to Participants

  
	

   

  	

   

  	

   

  
	

  VI.

  	

   

  	

  Determination of

  Annual Award Fund

  
	

   

  	

   

  	

   

  
	

  VII.

  	

   

  	

  Calculation

  of Award

  
	

   

  	

   

  	

  Table

  I – 2002 Annual Cash Incentive Compensation Award – Group I

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Table

  II – 2002 Annual Cash Incentive Compensation Award – Group II

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Table

  III – 2002 Annual Cash Incentive Compensation Award – Group III

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Table

  IV – 2002 Senior Management Incentive Compensation Plan – Stock Option Awards

  
	

   

  	

   

  	

   

  
	

  VIII.

  	

   

  	

  Miscellaneous Provisions

  
	

   

  	

   

  	

  Attachment A – Notice of Participation

  
	

   

  	

   

  	

  Attachment B – Designation of Beneficiary

  

 

 

ARTICLE I

OBJECTIVES

 

Section 1.01

This plan is designed to

reward senior management for meeting or exceeding industry standards for

profitability and adopted to achieve the following objectives:

(a)               Increase the profitability and growth of

Community Trust Bancorp, Inc. in a manner which is consistent with other goals

of the Company, its stockholders and its employees,

(b)              Provide executive compensation which is

competitive with other financial institutions,

(c)               Attract and retain personnel of

outstanding ability and encourage excellence in the performance of individual

responsibilities,

(d)              Motivate and reward those members of

management who contribute to the success of the Company,

(e)               Distinguish among the performance

contributions of some individuals by providing financial recognition for

individual performance, as well as group performance, and

(f)                 Allow the flexibility which permits revision and

strengthening from time to time to reflect changing organizational goals and

objectives.

 

1

 

ARTICLE II

DEFINITIONS

 

Section 2.01

As used herein, the

following words and phrases shall have the meanings below unless the context

clearly indicates otherwise:

(a)               “Annual Incentive Plan” or “Annual Plan”

shall mean the Senior Management Incentive Compensation Plan set forth in this

document and all amendments thereto.

(b)              “Award Period” means one Fiscal Year.

(c)               “Board” means the Board of Directors of

Community Trust Bancorp, Inc.

(d)              “Company” means Community Trust Bancorp,

Inc., and its subsidiaries.

(e)               “Compensation Committee” means the

Compensation Committee of the Board.

(f)                 “Disability” means the total and permanent

disability of a participant as defined by any Long-Term Disability Plans in

effect for the Company and as thereafter may be amended.

(g)              “Effective Date” means the date upon which

the Plan shall become effective.

(h)              “Fiscal Year” means the accounting period

adopted by the Company for federal income tax purposes.

(i)                  “Participant” means a person designated by

the Company to participate in the Plan.

(j)                  “Plan” shall mean the Company’s Senior

Management Incentive Compensation Plan.

(k)               “Salary” or “Salaries” shall mean the

base salary in effect for each participant as of the last pay period in

December of the Award Period.

(l)                  “Stock Option” shall mean Stock Options

granted under the Community Trust Bancorp, Inc. 1998 Stock Option Plan as

hereinafter may be amended including substitutions or replacements of the

Plan.  Such options shall be Incentive

Stock Options to the extent possible under tax laws in effect at the time the

option is awarded.

 

2

 

ARTICLE III

ADMINISTRATION OF THE PLAN

 

Section 3.01

The Compensation

Committee shall administer the Plan and employ such other agents as may

reasonably be required to administer the Plan.

Section 3.02

The Compensation

Committee shall adopt such rules and regulations of general application as are

beneficial for the administration of the Plan and shall make all discretionary

decisions involving a participant of the Plan. Said committee shall also have

the right to interpret the Plan, to determine the Effective Date, and to

approve all employees who are to participate in the Plan.

Section 3.03

A majority of the

Compensation Committee shall constitute a quorum.  The acts of a majority of the members present at any meeting at

which there is a quorum shall be valid acts. 

Acts reduced to and approved in writing by a majority of said committee

shall also be valid acts.

Section 3.04

All incentive

compensation payable under the Plan shall be paid from the general assets of

the Company.  To the extent that any

person acquires a right to receive payments under the Plan, such right shall be

no greater than the right of any unsecured creditor of the Company.

Section 3.05

The Compensation

Committee may authorize the President and CEO of the Company to send a written

notice of such Plan to each selected Participant.  No person shall have the right to be included in the Plan until

receiving said notice in the form of Attachment “A” hereto.

Section 3.06

All costs and expenses

involved in the administration of this Plan shall be paid by the Company.

Section 3.07

Any determination or

action of the Compensation Committee or the Board shall be final, conclusive

and binding on all participants and their beneficiaries, heirs, personal

representatives, executors and administrators.

Section 3.08

The Board of Directors,

in its sole discretion, may amend, modify or terminate the Plan at any

time.  The Board shall also annually

review the pre-determined performance standards and may amend such schedules in

its sole discretion.

 

3

 

 

ARTICLE IV

PARTICIPANT ELIGIBILITY

 

Section 4.01

The following groups

shall participate in the Plan:

(a)               Group I shall consist of the Executive

Committee of the Corporation.

(b)              Group II shall consist of the (1) CTBNA

officers responsible for the divisions of Commercial Lending, Consumer Lending,

Residential Real Estate Lending, Finance, Sales and Marketing, Human Resources,

Compliance and (2) the Presidents of each market.

(c)               Group III shall consist of Senior Vice

Presidents of consolidated functions who are selected for participation by the

Compensation Committee.

(d)     Individuals below SVP level may be

recommended and approved by the Compensation Committee for special awards of

options for extraordinary performance.

 

Section 4.02

Voluntary or involuntary

termination of full-time employment of a Participant prior to the payment of

incentive awards for an Award Period will result in such Participant forfeiting

any incentive compensation for the Award Period (except as provided in Section

4.03 herein).

Section 4.03

If a Participant dies,

retires, becomes disabled, or is granted a leave of absence during an Award

Period, the Compensation Committee may, at its discretion or under such rules

as it may have prescribed, award partial incentive compensation based on the

level of achievement in relation to goals established for the Award Period.

Section 4.04

Directors who are also

employees of the Company shall be eligible to participate in the Plan.  However, a director who is compensated on

the basis of a fee or retainer, as distinguished from a salary, shall not be

eligible.

Section 4.05

New employees of the Company and persons promoted during the Award

Period who were not eligible to participate in the Plan at the beginning of the

Award Period, but have become a member of Group I, II, or III shall participate

in the Plan so long as such eligibility came into existence no later than six (6)

months after the beginning of said Award Period.  If a person becomes eligible at a date later than six (6) months

into an Award Period, such person shall not be a Participant under this Plan

until the first day of the next Award Period.

 

4

 

ARTICLE V

PAYMENT TO PARTICIPANTS

 

Section 5.01

Incentive compensation to

be awarded under the Plan shall be paid to Participants within thirty days

after the close of the Award Period. 

Awards are not earned until paid to Participants.

Section 5.02

A Participant may elect

to defer payment of all or part of his or her incentive compensation so long as

the Participant requests such deferred payment under the terms of the Company’s

Voluntary Deferred Compensation Plan.

 

5

 

ARTICLE VI

DETERMINATION

OF ANNUAL AWARD FUND

 

Section 6.01

The Annual Incentive Plan fund for each group shall be generated by a

percent of the aggregate salaries for the individuals in each group.  The target award fund shall be computed as

shown in Table I below:

 

TABLE I

TARGET

ANNUAL AWARD FUND

	

  GROUP

  	

   

  	

  AGGREGATE

  SALARIES

  	

   

  	

  TARGET

  AWARD EXPRESSED

  AS A% OF SALARIES

  	

   

  	

  TARGET ANNUAL

  AWARD FUND

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  I

  	

   

  	

  $

  	

   

  	

   

  	

  X

  	

   

  	

  10

  	

  %

  	

  =

  	

   

  	

  $

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  II

  	

   

  	

  $

  	

   

  	

   

  	

  X

  	

   

  	

  9

  	

  %

  	

  =

  	

   

  	

  $

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  III

  	

   

  	

  $

  	

   

  	

   

  	

  X

  	

   

  	

  8.5

  	

  %

  	

  =

  	

   

  	

  $

  	

   

  	

   

  

 

Section 6.02

The actual amount of the

Senior Management Incentive Compensation Plan award fund shall be calculated

according to a schedule comparing Earnings Per Share for the Award Period to a

pre-determined performance standard. 

When performance is at or above the performance standard, the actual

award fund is adjusted upward from the target award fund.

Section 6.03

There shall be a minimum

acceptable performance beneath which no incentive awards are paid (sometimes

referred to as the “threshold”) and a maximum above which there is no

additional award paid to avoid excessive payout in the event of windfall

profits.  Said minimum and maximum shall

be reviewed annually and amended when necessary in the sole discretion of the

Compensation Committee.

Section 6.04

A Participant who is rated a “4” or “5” on the most recent Performance

Appraisal and Development Plan shall not be eligible to receive an award under

the Plan.

 

6

 

ARTICLE VII

CALCULATION OF AWARD

Section 7.01

The Corporation’s (Group I) will earn an award determined by Earnings

Per Share, as shown below:

 

TABLE I

2002

ANNUAL CASH INCENTIVE COMPENSATION AWARD

INITIAL

CALCULATION

 

Group I - Executive Committee

of Community Trust Bancorp, Inc.

 

	

  *  Target/ROAA

  	

   

  	

  Award As A

  % of 

  Target Award

  	

   

  	

  Award As A

  

  % of Salary

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  Group I

  	

   

  
	

  ROAA

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Base

  	

  1.04

  	

  %

  	

  100

  	

  %

  	

  10

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  1.12

  	

  %

  	

  200

  	

  %

  	

  20

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  1.17

  	

  %

  	

  300

  	

  %

  	

  30

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  1.22

  	

  %

  	

  400

  	

  %

  	

  40

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  1.27

  	

  %+

  	

  600

  	

  %

  	

  60

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
							

 

*  For 2002, 100% of Targeted

ROAA and $ 2.35 earnings per share is required for an incentive to be earned.

 

7

 

Section 7.02

The Corporation’s (Group II) will earn an award determined by Earnings

Per Share, as shown below:

 

TABLE II

2002

ANNUAL CASH INCENTIVE COMPENSATION AWARD

INITIAL

CALCULATION

 

Group II — Consolidated

Division Officers of CTB, N.A. and Market Presidents

 

	

  EPS as A % of 

  *  Target/ROAA

  	

   

  	

  Award As A

  % of 

  Target Award

  	

   

  	

  Award As A

  % of Salary

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  Group II

  	

   

  
	

   

  	

   

  	

  ROAA

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Base

  	

   

  	

  1.04

  	

  %

  	

  100

  	

  %

  	

  9

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  1.12

  	

  %

  	

  133

  	

  %

  	

  12

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  1.17

  	

  %

  	

  200

  	

  %

  	

  18

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  1.22

  	

  %

  	

  275

  	

  %

  	

  25

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  1.27

  	

  %+

  	

  333

  	

  %

  	

  30

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

*  For 2002, 100% of the

targeted ROAA and $ 2.35 earnings per share is required for an incentive to

be  earned.

 

8

 

Section 7.03

Senior Vice Presidents of consolidated functions designated by the

Compensation Committee will earn an award primarily determined by earnings per

share, as shown below:

 

TABLE

III

2002

ANNUAL CASH INCENTIVE COMPENSATION AWARD

INITIAL

CALCULATION

 

Group III - Senior Vice

Presidents of Consolidated Functions

 

	

  EPS as A % of 

  *

  Target/ROAA

  	

   

  	

  Award As A

  % of 

  Target Award

  	

   

  	

  Award As A

  % of Salary

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  Group III

  	

   

  
	

   

  	

   

  	

  ROAA

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Base

  	

   

  	

  1.04

  	

  %

  	

  100

  	

  %

  	

  8.5

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  1.12

  	

  %

  	

  118

  	

  %

  	

  10

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  1.17

  	

  %

  	

  176

  	

  %

  	

  15

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  1.22

  	

  %

  	

  235

  	

  %

  	

  20

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  1.27

  	

  %+

  	

  294

  	

  %

  	

  25

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

*  For 2002, 100% of the

targeted ROAA is and $2.35 earnings per share is required to earn an incentive.

 

9

 

Section 7.04

Participants in Groups I, II, and III shall be eligible to receive

Stock Options awards on the same day that cash awards are paid under the terms

of this Plan.  Such Stock Options shall

have a face value equal to the percentage of salary shown on Table V below,

adjusted in the same manner and in the same proportion as cash awards are

adjusted under the terms of Sections 7.03, 7.04, and 7.05, and rounded down as

necessary to grant an option for whole shares.

 

TABLE IV

 

2002

SENIOR MANAGEMENT INCENTIVE COMPENSATION PLAN

STOCK

OPTION AWARDS

 

	

  EPS as A % of

  	

   

  	

  Stock Option Award As A % of Salary

  	

   

  
	

  *

  Target/ROAA

  	

   

  	

  Group I

  	

   

  	

  Group II

  	

   

  	

  Group III

  	

   

  
	

   

  	

   

  	

  ROAA

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Base

  	

   

  	

  1.04

  	

  %

  	

  100

  	

  %

  	

  50

  	

  %

  	

  25

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  1.12

  	

  %

  	

  125

  	

  %

  	

  60

  	

  %

  	

  30

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  1.17

  	

  %

  	

  150

  	

  %

  	

  70

  	

  %

  	

  35

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  1.22

  	

  %

  	

  175

  	

  %

  	

  80

  	

  %

  	

  40

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  1.27

  	

  %+

  	

  200

  	

  %

  	

  100

  	

  %

  	

  50

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

*  For 2002, 100% of Targeted

ROAA and $2.35 earnings per share is required for an incentive to be earned.

 

10

 

ARTICLE VIII

MISCELLANEOUS PROVISIONS

 

Section 8.01

If the financial

performance of the Company for any Fiscal Year taken into account for

determination of an award is found to be incorrect by the Company’s independent

certified public accountants and was more than the correct amount, there shall

be no recourse by the Company against any person or estate.  However, the Company shall have the right to

correct such error by reducing by the excess amount any subsequent payments yet

to be made under the Plan.

Section 8.02

The Compensation

Committee may elect to remove unusual, extraordinary or non-recurring items

from the calculation of the Earnings Per Share.

Section 8.03

The Company shall not

merge into or consolidate with another entity or sell all or substantially all of

its assets to another entity unless such other entity shall become obligated to

perform the terms and conditions hereof relating to any awards already earned

but not yet paid to the participant on his/her behalf.

 

11

 

ATTACHMENT A

 

NOTICE OF PARTICIPATION

 

 

                          is

eligible for participation in the 2002 Plan Year for Community Trust Bancorp,

Inc. Senior Management Incentive Compensation Plan, such participant being

subject to all of the terms and conditions of said Plan.

 

 

 

	

   

  	

  Compensation Committee of the Board of Directors

  
	

   

  	

   

  
	

   

  	

  BY:

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Dated:

  	

   

  	

   

  
						

 

12

 

ATTACHMENT B

 

DESIGNATION OF BENEFICIARY

 

I,                          a

participant in the Community Trust Bancorp, Inc. Senior Management Incentive

Compensation Plan, name the following as my primary beneficiary under said Plan

in the event of my death prior to receiving an award payable to me under said

Plan.

 

	

   

  	

   

  	

   

  
	

  Name

  	

   

  	

  Relationship

  
	

   

  	

   

  	

   

  
	

   

  	

  Address

  	

   

  

If the primary beneficiary predeceases me, I designate the following

persons as a contingent beneficiary, in the order shown, to receive an award

payable to me under the Plan:

 

	

  Name

  	

   

  	

  Relationship

  
	

   

  	

  Address

  	

   

  
	

   

  	

   

  	

   

  
	

  Name

  	

   

  	

  Relationship

  
	

   

  	

  Address

  	

   

  
	

   

  	

   

  	

   

  
	

  Name

  	

   

  	

  Relationship

  
	

   

  	

  Address

  	

   

  

This supersedes any previous beneficiary designation made by me with

respect to this Plan.  However, any

compensation covered by the Community Trust Bancorp, Inc. Voluntary Deferred

Compensation Plan shall be governed by the Beneficiary Designation applicable

to that Plan.

	

   

  	

   

  	

   

  
	

  Date

  	

   

  	

  Signature of

  Participant

  

 

13Document

EXHIBIT

10.4

 

TENNANT COMPANY

EXCESS BENEFIT PLAN

 

(As Amended and

Restated Effective January 1, 1998)

 

Article I

 

General

 

Sec. 1.1  Name of Plan.  The name of the plan set forth herein is “Tennant Company Excess

Benefit Plan”.  It is sometimes referred

to herein as the “Plan”.

 

Sec. 1.2  Purpose.  The

Plan has been established for the following purposes:

 

(a)      To provide the additional

benefits which would have been provided under the Tennant Company Defined

Benefit Retirement Plan (the “Defined Benefit Plan”) but for the limitations

imposed by Section 415 of the Internal Revenue Code as amended from time to

time (the “Code”).  By providing such

benefits, the Plan is an “excess benefit plan” under Section 3(36) of the

Employee Retirement Income Security Act of 1974 (“ERISA”).

 

(b)     To provide benefits which

would have been payable in the form of Profit Related Retirement, Profit

Sharing, or Matching Contributions under the Tennant Company Profit Sharing and

Employee Stock Ownership Plan (“Profit Sharing Plan”) but for limitations on

such contributions resulting from the following provisions of the Code or the

Profit Sharing Plan:

 

(1)                  The $7,000

annual limit on Individual Shelter Contributions under Code section 402(g) (as

adjusted for inflation).

 

(2)                  The deferral

percentage limits under Code section 401(k).

 

(3)                  The limits on

employer matching contributions under Code section 401(m).

 

(4)                  The limit on

covered compensation under Code section 401(a)(17).

 

(5)                  The $30,000

limit on annual additions under Code section 415 (as adjusted for inflation).

 

(6)                  The exclusion

from Certified Earnings for the Plan Year under the Profit Sharing Plan and/or

for purposes of this Plan of amounts deferred during such Plan Year by the

Participant under the Tennant Management Deferral Agreement with respect to

base pay or cash bonus payout (disregarding any deferrals of performance share

payout or the actual payout of such amounts).

 

Such

benefits are paid in the form of immediate cash compensation and therefore are

not subject to ERISA requirements.

 

(c)      To provide benefits which

would have been payable under the Defined Benefit Plan but for the limit on

covered compensation imposed by Code section 401(a)(17).  By 

 

1

 

       providing such benefits, the Plan

provides deferred compensation for a select group of management or highly

compensated employees and therefore is exempt from most requirements of ERISA.

 

(d)     To provide benefits which

would have been payable under the Defined Benefit Plan but for the provision

excluding bonuses from Certified Earnings under that Plan.  By providing such benefits, the Plan

provides deferred compensation for a select group of management or highly

compensated employees and therefore is exempt from most requirements of ERISA.

 

(e)      To provide benefits which

would have been payable under the Defined Benefit Plan if deferred salary

increases for years beginning on or after January 1, 1993 had been

included in Certified Earnings for the Plan Year in which each such amount

would have been paid in the absence of the deferral.  By providing such benefits, the Plan provides deferred

compensation for a select group of management or highly compensated employees

and therefore is exempt from most requirements of ERISA.

 

(f)        To provide benefits which

would have been payable under the Defined Benefit Plan and this Plan if amounts

deferred under the Tennant Management Deferral Agreement with respect to base

pay or cash bonus payout (but disregarding performance share payouts or

deferrals of such payouts) had been taken into account as Certified Earnings in

the Plan Year in which such amounts were deferred (and disregarded in the Plan

Year in which such deferred amounts are actually paid).  By providing such benefits, the Plan

provides deferred compensation for a select group of management or highly

compensated employees and therefore is exempt from most requirements of ERISA.

 

Sec. 1.3  Definitions.  Unless

otherwise specified herein, capitalized terms used herein with respect to

benefits relating to the Defined Benefit Plan shall have the meanings specified

in the Defined Benefit Plan as amended from time to time, and capitalized terms

used herein with respect to benefits relating to the Profit Sharing Plan shall

have the meanings specified in the Profit Sharing Plan as amended from time to

time.

 

Sec. 1.4  Effect on Predecessor Plans.  This Plan amends and supersedes any excess

benefit plan previously established by the Company.

 

Article II

 

Benefits Relating to Defined Benefit

Plan

 

Sec. 2.1  Eligibility to Receive a Benefit.  If a person’s Termination

of Employment occurs under circumstances that a benefit is payable under the

Defined Benefit Plan to him or his surviving spouse, contingent annuitant, or

beneficiary, a benefit shall also be payable under this Plan if the benefit

under the Defined Benefit Plan is limited (i) by operation of Sec. 6.11 of said

Plan, and/or (ii) because of the dollar limit on Certified Earnings taken into

account under said Plan (Plan Sec. 2.7(f)) due to Code section 401(a)(17),

and/or (iii) because amounts deferred from base pay or cash bonus payout under

the Tennant Management Deferral Agreement do not count as Certified Earnings

for the Plan Year in which deferred.  A

member of Operating Management who is not described in the previous sentence

but who is eligible to defer part or all of a salary increase for a 

2

 

year beginning on or

after January 1, 1993 is also eligible for a benefit under this Article,

except that paragraphs (1), (2), (3) and (4) of Sec. 2.2(a) shall not apply to

such a person.

 

Sec. 2.2  Benefit Amounts.  If

a person is eligible under Sec. 2.1, a benefit shall be paid to him or his

surviving spouse, contingent annuitant, or beneficiary for each month that a

benefit is payable to any of them under the Defined Benefit Plan.  The monthly amount of said benefit shall be

equal to the amount, if any, by which (a) exceeds (b):

 

(a)      The monthly amount which

would have been payable to the Participant or his surviving spouse, contingent

annuitant, or beneficiary under the Defined Benefit Plan for that month if:

 

(1)                  The limitations

imposed by Sec. 6.11 of the Defined Benefit Plan were not applicable,

 

(2)                  The dollar limit

in Sec. 2.7(f) of the Defined Benefit Plan were not applicable, and

 

(3)                  Bonuses were not

excluded from Certified Earnings under Sec. 2.7(a) of the Defined Benefit Plan.

 

(4)                  Amounts deferred

from base pay or cash bonus payout under the Tennant Management Deferral Agreement

(disregarding  performance share payouts

and deferrals of such amounts) had been included in Certified Earnings for the

Plan Year in which each such amount would have been included in the absence of

the deferral (and are not included for the Plan Year in which such deferred

amounts would be included at the time they are actually paid).

 

(5)                  Deferred salary

increases had been included in Certified Earnings for the Plan Year in which

each such amount would have been paid in the absence of the deferral (and are

not included for the Plan Year in which such deferred amounts are actually

paid).

 

(b)     The monthly amount actually

payable under the Defined Benefit Plan to the Participant or his surviving

spouse, contingent annuitant or beneficiary for that month.

 

The amounts under

subsections (a) and (b) shall both be determined under the settlement option or

form of payment under which benefits are being paid, using the same actuarial

equivalent factors and reductions for early commencement of benefits, if any.  No benefit shall be paid for any month for

which the amount in subsection (b) equals or exceeds the amount in subsection

(a).

 

Sec. 2.3  Source of Benefits. 

All benefits payable hereunder shall be paid by the

Company from its general assets. 

Benefits shall be paid to the Participant during his lifetime.  Any benefits payable with respect to a

Participant following his death shall be paid to the person or persons, if any,

eligible to receive benefits with respect to the Participant under the Defined

Benefit Plan.

 

3

 

Article III

 

Benefits Relating to Profit Sharing

Plan

 

Sec. 3.1  Eligibility to Receive a Benefit.  A Participant in the

Profit Sharing Plan shall be eligible to receive benefits under this Article

III only if one or more of the following conditions is satisfied:

 

(a)      Due to operation of Sec.

7.2, 7.3 and/or 7.5 of the Profit Sharing Plan, his Individual Shelter

Contributions were limited to an amount less than that the amount he elected.

 

(b)     Due to operation of Sec. 7.4

and/or 7.5 of the Profit Sharing Plan, his Matching Contributions were limited

to less than the amount provided by Sec. 6.6 and/or 6.7 of the Profit Sharing

Plan.

 

(c)      Due to operation of Sec.

2.7(e) of the Profit Sharing Plan, his Certified Earnings in excess of the

limit under Code section 401(a)(17) were not recognized.

 

(d)     The Annual Additions to his

Account were limited due to the $30,000 limit in Sec. 7.1(a)(1) of the Profit

Sharing Plan, and said limitation resulted in a reduction of his share of

Profit Related Retirement, Profit Sharing, and/or Matching Contributions.

 

(e)      Amounts deferred from base

pay or cash bonus payouts under the Tennant Management Deferral Agreement are

not included in the Participant’s Certified Earnings for the Plan Year in which

such amounts would have been included if the deferral had not occurred, and

said exclusion resulted in a reduction of the Participant’s share of Profit

Related Retirement, Profit Sharing, and/or Matching Contributions under the

Profit Sharing or would reduce the amount payable under this Plan.

 

Sec. 3.2  Amount of Benefit. 

The amount payable with respect to a particular Plan

Year to a Participant who meets the eligibility requirements of Sec. 3.1 for

that year shall be equal to the amount, if any, by which the amount in (a)

exceeds the amount in (b).

 

(a)      The aggregate Profit Related

Retirement, Profit Sharing, and Matching Contributions the Participant would

have received under the Profit Sharing Plan if none of the limitations referred

to in Sec. 3.1(a)-(e) of this Plan were applicable.  For this purpose:

 

(1)                  If a

Participant’s total Individual Shelter Contributions to the Profit Sharing Plan

for a particular Plan Year were less than $7,000 (adjusted for inflation pursuant

to Treasury regulations), his Matching Contributions for that year shall be

determined on the basis of the Individual Shelter Contributions actually

elected by the Participant, rather than on the basis of the maximum Individual

Shelter Contributions he could have elected, and on the percentage rate

actually received for the match on the actual contributions.

 

(2)                  If a

Participant’s total Individual Shelter Contributions to the Profit Sharing Plan

for a particular Plan Year were $7,000 (adjusted for inflation pursuant to

Treasury regulations), his Matching Contributions for that year shall be the

amount he would have received but for said limitations if he had made

Individual Shelter 

 

4

Contributions

equal to 4% of Certified Earnings, calculated using the percentage rate

actually received for the match on Individual Shelter Contributions which were

actually made.

 

(3)                  For purposes of

applying this subsection (a), amounts deferred from base pay or cash bonus

payouts under the Tennant Management Deferral Agreement which are subsequently

paid to the Participant shall be excluded from Certified Earnings at the time

of payment.  Performance share payouts

and deferrals of such payouts under the Tennant Management Deferral Agreement

shall be excluded from Certified Earnings at all times.

 

(b)     The amount of Profit Related

Retirement, Profit Sharing, and Matching Contributions actually allocated to

the Participant under the Profit Sharing Plan after application of the

limitations referred to in Sec. 3.1(a)-(e) of this Plan.

 

Sec. 3.3  Form and Timing of Payment.  Amounts payable under Sec. 3.2 will be paid to

the Participant by his Participating Employer in cash as promptly as possible

after the amounts thereof have been determined.  Amounts payable after the Participant’s death will be paid to his

Beneficiary.

 

Article IV

 

Amendment or Termination

 

Sec. 4.1  Amendment.  The

Company, by action of the Board, may amend the Plan from time to time.

 

Sec. 4.2  Termination.  The

Company, by action of the Board, may terminate the Plan.

 

Sec. 4.3  Preservation of Benefits. 

No amendment or termination of the Plan shall have the

effect of reducing a Participant’s aggregate benefit under Article II of this

Plan and the Defined Benefit Plan to less than the amount which would have been

payable to him if the amendment or termination had not occurred, said amount to

be based solely on his compensation and service prior to the effective date of

the amendment or termination.

 

Sec. 4.4  Effective Date of Document.  This document applies to eligible persons

whose Termination of Employment occurs on or after January 1, 1998, and

supersedes all prior versions of the Plan with respect to such persons.

 

5

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