Document:

EX-4.1

 Exhibit 4.1 

CHASE ISSUANCE TRUST 

as Issuing Entity 
 CLASS
A(2016-2) TERMS DOCUMENT 
 dated as of June 17, 2016 

to 
 SECOND AMENDED AND
RESTATED 
 CHASESERIES INDENTURE SUPPLEMENT 

dated as of January 20, 2016 

to 
 FOURTH AMENDED AND
RESTATED 
 INDENTURE 

dated as of January 20, 2016 

WELLS FARGO BANK, NATIONAL ASSOCIATION 

as Indenture Trustee and Collateral Agent 

 TABLE OF CONTENTS 
  

							
	 	 	 	  	PAGE	 
	ARTICLE I	  
	
	Definitions and Other Provisions of General Application	  
			
	Section 1.01	 	 Definitions
	  	 	1	  
	Section 1.02	 	 Governing Law
	  	 	3	  
	Section 1.03	 	 Counterparts
	  	 	3	  
	Section 1.04	 	 Ratification of Indenture and Indenture Supplement
	  	 	3	  
	
	ARTICLE II	  
	
	The Class A(2016-2) Notes	  
			
	Section 2.01	 	 Creation and Designation
	  	 	5	  
	Section 2.02	 	 Specification of Required Subordinated Amount and Other Terms
	  	 	5	  
	Section 2.03	 	 Interest Payment
	  	 	5	  
	Section 2.04	 	 Payments of Interest and Principal
	  	 	6	  
	Section 2.05	 	 Form of Delivery of Class A(2016-2) Notes; Depository; Denominations
	  	 	6	  
	Section 2.06	 	 Delivery and Payment for the Class A(2016-2) Notes
	  	 	6	  
	Section 2.07	 	 Supplemental Indenture
	  	 	7	  
	Section 2.08	 	 No Ratings Confirmation Required for Class A(2016-2) Notes
	  	 	7	  

 THIS CLASS A(2016-2) TERMS DOCUMENT (this “Terms Document”), among the CHASE ISSUANCE
TRUST, a statutory trust created under the laws of the State of Delaware (the “Issuing Entity”), having its principal office at c/o Wilmington Trust Company, 1100 North Market Street, Wilmington, Delaware 19890-1600, and WELLS FARGO BANK,
NATIONAL ASSOCIATION, a national banking association, as indenture trustee (the “Indenture Trustee”) and as collateral agent (the “Collateral Agent”), is made and entered into as of June 17, 2016. 

Pursuant to this Terms Document, the Issuing Entity and the Indenture Trustee shall create a new Tranche of CHASEseries Class A Notes and
shall specify the principal terms thereof. 
 ARTICLE I 

Definitions and Other Provisions of General Application 

Section 1.01    Definitions. For all purposes of this Terms Document, except as otherwise expressly provided or
unless the context otherwise requires: 
 (1)     the terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular; 
 (2)     all other terms used herein which are
defined in the Indenture Supplement, the Indenture or the Asset Pool Supplement, either directly or by reference therein, have the meanings assigned to them therein; 

(3)     as used in this Terms Document and in any certificate or other document made or delivered pursuant hereto or
thereto, accounting terms not defined in this Terms Document or in any such certificate or other document, and accounting terms partly defined in this Terms Document or in any such certificate or other document to the extent not defined, shall have
the respective meanings given to them under GAAP. To the extent that the definitions of accounting terms in this Terms Document or in any such certificate or other document are inconsistent with the meanings of such terms under GAAP, the definitions
contained in this Terms Document or in any such certificate or other document shall control; 
 (4)     the words
“hereof,” “herein,” “hereunder” and words of similar import when used in this Terms Document shall refer to this Terms Document as a whole and not to any particular provision of this Terms Document; references to any
subsection, Section, clause, Schedule or Exhibit are references to subsections, Sections, clauses, Schedules and Exhibits in or to this Terms Document unless otherwise specified; the term “including” means “including without
limitation”; references to any law or regulation refer to that law or regulation as amended from time to time and include any successor law or regulation; references to any Person include that Person’s successors and assigns; and
references to any agreement refer to such agreement, as amended, supplemented or otherwise modified from time to time; 

(5)     in the event that any term or provision contained herein shall conflict with or be inconsistent with any term or
provision contained in the Indenture Supplement, the 

 
Indenture or the Asset Pool Supplement, the terms and provisions of this Terms Document shall be controlling; and 

(6)     each capitalized term defined herein shall relate only to the Class A(2016-2) Notes and no other Tranche of
CHASEseries Notes issued by the Issuing Entity. 
 “Asset Pool Supplement” means the Third Amended and Restated Asset Pool
One Supplement to the Indenture, dated as of January 20, 2016, as amended, by and among the Issuing Entity, the Indenture Trustee and the Collateral Agent. 

“Beneficiary” means Chase Card Funding LLC, in its capacity as beneficial owner of the Issuing Entity. 

“Class A(2016-2) Adverse Event” means the occurrence of any of the following: (a) an Early Amortization Event with
respect to the Class A(2016-2) Notes, (b) an Event of Default and acceleration of the Class A(2016-2) Notes, (c) the Class A Usage of the Class B Required Subordinated Amount for the Class A(2016-2) Notes becomes greater than zero or
(d) the Class A Usage of the Class C Required Subordinated Amount for the Class A(2016-2) Notes becomes greater than zero. 

“Class A(2016-2) Note” means any Note, substantially in the form set forth in Exhibit A-1 to the Indenture Supplement,
designated therein as a Class A(2016-2) Note and duly executed and authenticated in accordance with the Indenture. 
 “Class
A(2016-2) Noteholder” means a Person in whose name a Class A(2016-2) Note is registered in the Note Register. 
 “Class
A(2016-2) Termination Date” means the earliest to occur of (a) the Principal Payment Date on which the Outstanding Dollar Principal Amount of the Class A(2016-2) Notes is paid in full, (b) the Legal Maturity Date and (c) the
date on which the Indenture is discharged and satisfied pursuant to Article V thereof. 
 “Class A Required Subordinated Amount of
Class B Notes” is defined in Section 2.02(a). 
 “Class A Required Subordinated Amount of Class C Notes” is
defined in Section 2.02(b). 
 “Controlled Accumulation Amount” means $150,000,000 provided, however, if the
Accumulation Period Length is determined to be less than twelve months pursuant to Section 3.12(b)(ii) of the Indenture Supplement, the Controlled Accumulation Amount for any Note Transfer Date with respect to the Class A(2016-2) Notes will be
the amount specified in the definition of “Controlled Accumulation Amount” in the Indenture Supplement. 

“Indenture” means the Fourth Amended and Restated Indenture, dated as of January 20, 2016, as amended, between the
Issuing Entity and the Indenture Trustee. 

 “Indenture Supplement” means the Second Amended and Restated CHASEseries
Indenture Supplement, dated as of January 20, 2016, among the Issuing Entity, the Indenture Trustee and the Collateral Agent. 

“Initial Dollar Principal Amount” means $1,800,000,000. 

“Interest Payment Date” means July 15, 2016 and the 15th day of each month thereafter, or if such 15th day is not a
Business Day, the next succeeding Business Day. 
 “Interest Period” means, with respect to any Interest Payment Date, the
period from and including the previous Interest Payment Date (or in the case of the initial Interest Payment Date, from and including the Issuance Date) to but excluding such Interest Payment Date. 

“Issuance Date” means June 17, 2016. 

“Legal Maturity Date” means June 15, 2021. 

“Note Interest Rate” means a rate per annum equal to 1.37%. 

“Paying Agent” means Wells Fargo Bank, National Association. 

“Predecessor Note” means, with respect to any particular Note, every previous Note evidencing all or a portion of the same
debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 3.06 of the Indenture in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence
the same debt as the mutilated, lost, destroyed or stolen Note. 
 “Record Date” means, for any Note Transfer Date, the
last Business Day of the preceding Monthly Period. 
 “Scheduled Principal Payment Date” means June 17, 2019. 

“Stated Principal Amount” means $1,800,000,000. 

Section 1.02    Governing Law. THIS TERMS DOCUMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 

Section 1.03    Counterparts. This Terms Document may be executed in any number of counterparts, each of which so
executed will be deemed to be an original, but all such counterparts will together constitute but one and the same instrument. 
 Section
1.04    Ratification of Indenture and Indenture Supplement. As supplemented by this Terms Document, each of the Indenture, the Asset Pool Supplement and 

  
 3 

 
the Indenture Supplement is in all respects ratified and confirmed and the Indenture as so supplemented by the Asset Pool Supplement and the Indenture Supplement as so supplemented by this Terms
Document shall be read, taken and construed as one and the same instrument. 
 [END OF ARTICLE I] 

  
 4 

 ARTICLE II 

The Class A(2016-2) Notes 

Section 2.01     Creation and Designation. There is hereby created a Tranche of CHASEseries Class A Notes to
be issued pursuant to the Indenture and the Indenture Supplement to be known as the “CHASEseries Class A(2016-2) Notes.” 

Section 2.02     Specification of Required Subordinated Amount and Other Terms. 

(a)     For the Class A(2016-2) Notes for any date of determination, the Class A Required Subordinated Amount of
Class B Notes will be an amount equal to 8.13953% of (i) prior to the occurrence of a Class A(2016-2) Adverse Event, the Adjusted Outstanding Dollar Principal Amount of the Class A(2016-2) Notes on such date of determination or (ii) on and
after the date on which a Class A(2016-2) Adverse Event shall have occurred, the greater of (1) the Adjusted Outstanding Dollar Principal Amount of the Class A(2016-2) Notes on such date of determination and (2) the Adjusted Outstanding
Dollar Principal Amount of the Class A(2016-2) Notes as of the close of business on the day immediately preceding the date on which such Class A(2016-2) Adverse Event shall have occurred. 

(b)     For the Class A(2016-2) Notes for any date of determination, the Class A Required Subordinated Amount of
Class C Notes will be an amount equal to 8.13953% of (i) prior to the occurrence of a Class A(2016-2) Adverse Event, the Adjusted Outstanding Dollar Principal Amount of the Class A(2016-2) Notes on such date or (ii) on and after the date
on which a Class A(2016-2) Adverse Event shall have occurred, the greater of (1) the Adjusted Outstanding Dollar Principal Amount of the Class A(2016-2) Notes on such date of determination and (2) Adjusted Outstanding Dollar Principal
Amount of the Class A(2016-2) Notes as of the close of business on the day immediately preceding the date on which such Class A(2016-2) Adverse Event shall have occurred. 

(c)     The Issuing Entity may change the percentages or the formulas set forth in either clause (a) or
(b) above without the consent of any Noteholder so long as the Issuing Entity has (i) received written confirmation from each Note Rating Agency that has rated any Outstanding Notes that the change in either of such percentages or
formulas, as applicable, will not result in a Ratings Effect with respect to any Outstanding Notes and (ii) delivered to the Indenture Trustee and the Note Rating Agencies a Master Trust Tax Opinion and an Issuing Entity Tax Opinion. 

Section 2.03     Interest Payment. 

(a)     For each Interest Payment Date, the amount of interest due with respect to the Class A(2016-2) Notes shall be an
amount equal to one-twelfth of the product of (i) the Note Interest Rate, times, (ii) the Outstanding Dollar Principal Amount of the Class A(2016-2) Notes determined as of the close of business on the Interest Payment Date preceding the
related Note Transfer Date for the Class A(2016-2) Notes; provided, however, that for the first Interest Payment Date, the amount of interest due with respect to the Class A(2016-2) Notes 

  
 5 

 
shall be $1,918,000. Interest on the Class A(2016-2) Notes will be calculated on the basis of a 360-day year consisting of twelve 30-day months. 

(b)     Pursuant to Section 3.03 of the Indenture Supplement, on each Note Transfer Date with respect to the Class
A(2016-2) Notes, the Indenture Trustee shall deposit into the Class A(2016-2) Interest Funding Sub-Account the portion of CHASEseries Available Finance Charge Collections allocable to the Class A(2016-2) Notes. 

Section 2.04     Payments of Interest and Principal. 

(a)     Any installment of interest or principal payable on any Class A(2016-2) Note which is punctually paid or duly
provided for by the Issuing Entity and the Indenture Trustee on the applicable Interest Payment Date or Principal Payment Date shall be paid by the Paying Agent to the Person in whose name such Class A(2016-2) Note (or one or more Predecessor Notes)
is registered on the Record Date, by wire transfer of immediately available funds to such Person’s account as has been designated by written instructions received by the Paying Agent from such Person not later than the close of business on the
third Business Day preceding the date of payment or, if no such account has been so designated, by check mailed first-class, postage prepaid to such Person’s address as it appears on the Note Register on such Record Date, except that with
respect to Notes registered on the Record Date in the name of the nominee of Cede & Co., payment shall be made by wire transfer in immediately available funds to the account designated by such nominee. 

(b)     The right of the Class A(2016-2) Noteholders to receive payments from the Issuing Entity will terminate on the
first Business Day following the Class A(2016-2) Termination Date. 
 Section 2.05     Form of Delivery of Class
A(2016-2) Notes; Depository; Denominations. 
 (a)     The Class A(2016-2) Notes shall be delivered in the form of
a global Registered Note as provided in Sections 2.02 and 3.01(i) of the Indenture, respectively. 
 (b)     The
Depository for the Class A(2016-2) Notes shall be The Depository Trust Company, and the Class A(2016-2) Notes shall initially be registered in the name of Cede & Co., its nominee. 

(c)     The Class A(2016-2) Notes will be issued in minimum denominations of $100,000 and integral multiples of $1,000 in
excess of $100,000. 
 Section 2.06     Delivery and Payment for the Class A(2016-2) Notes. 

The Issuing Entity shall execute and deliver the Class A(2016-2) Notes to the Indenture Trustee for authentication, and the Indenture Trustee
shall deliver the Class A(2016-2) Notes when authenticated, each in accordance with Section 3.03 of the Indenture. 

  
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 Section 2.07     Supplemental Indenture. 

The Issuing Entity may enter into a supplemental indenture with respect to the Class A(2016-2) Notes as provided in Section 9.01 of the
Indenture; provided, however, that any supplemental indenture which provides for an additional or alternative form of credit enhancement for the Class A(2016-2) Notes shall, in addition to the requirements set forth in Section 9.01 of the
Indenture, require confirmation from the Note Rating Agencies that have rated any Outstanding Notes of the CHASEseries that such change in credit enhancement will not result in a Ratings Effect with respect to any Outstanding Notes of the
CHASEseries. 
 Section 2.08     No Ratings Confirmation Required for Class A(2016-2) Notes. 

Notwithstanding Section 3.10(iv) of the Indenture, the Issuing Entity will not be required to obtain written confirmation from each Note
Rating Agency that an issuance of a new Tranche of Notes will not have a Ratings Effect on the Class A(2016-2) Notes. 
 [END OF ARTICLE II]

  
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 IN WITNESS WHEREOF, the parties hereto have caused this Terms Document to be duly executed, all
as of the day and year first above written. 
  

					
	CHASE ISSUANCE TRUST
		
	By:	 	 WILMINGTON TRUST COMPANY,
 not in
its individual capacity but solely
 as Owner Trustee on behalf of the Trust

		
	By:	 	 /s/ Jennifer A. Luce

		 	Name:	 	Jennifer A. Luce
		 	Title:	 	Vice President
	
	 WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Indenture Trustee and Collateral Agent

		
	By:	 	 /s/ Cheryl C. Zimmerman

		 	Name:	 	Cheryl C. Zimmerman
		 	Title:	 	Vice President

  

  
 Chase Issuance Trust

 CHASEseries Class A(2016-2) Terms Documentexhibit10-b.htm

Exhibit 10.1

 

SHOE CARNIVAL, INC. 2016 EXECUTIVE

INCENTIVE COMPENSATION PLAN

 

 

Section 1.    Purpose of Plan

 

          The purpose of the Plan is to promote the success of the Company by providing to participating executives of the Company bonus incentives that qualify as performance-based compensation within the meaning of Section 162(m) of the Code.

 

Section 2.    Definitions and Terms

 

          2.1    Accounting Terms.    Except as otherwise expressly provided or the context otherwise requires, financial and accounting terms are used as defined for purposes of, and shall be determined in accordance with, generally accepted accounting principles, as from time to time in effect in the United States of America, as applied and reflected in the consolidated financial statements of the Company, prepared in the ordinary course of business.

 

          2.2    Specific Terms.    The following words and phrases as used herein shall have the following meanings unless a different meaning is plainly required by the context:

 

“Annual Return To Shareholders” means the Company’s return to shareholders as represented by share price appreciation plus dividends paid on one share of Common Stock during any Year during a Performance Period.

 

“Average Sales Per Square Foot” for any Year means the aggregate Net Sales of all stores open during the entire Year, divided by the aggregate square footage of such stores.

 

“Average Sales Per Square Foot for New Stores” for any Year means the aggregate Net Sales of all stores opened in the prior Year and remaining open during the entire Year, divided by the aggregate square footage of such stores.

 

“Base Salary” in respect of any Performance Period means the aggregate base annualized salary of a Participant from the Company and all affiliates of the Company at the time the Participant is selected to participate for that Performance Period, exclusive of any commissions or other actual or imputed income from any Company provided benefits or perquisites, but prior to any reductions for salary deferred pursuant to any deferred compensation plan or for contributions to a plan qualifying under Section 401(k) of the Code or contributions to a cafeteria plan under Section 125 of the Code.

 

“Bonus” means a cash payment or payment opportunity as the context requires.

 

“Business Criteria” means any one or any combination of Annual Return to Shareholders, Net Sales, Net Income, Net Income before Nonrecurring Items, Operating Income, Return on Equity, Return on Assets, EPS, EBITDA, EBITDA before Nonrecurring Items, Comparable Store Sales, Average Sales Per Square Foot or Average Sales Per Square Foot for New Stores, in each case during any Year during a Performance Period.  In addition, Business Criteria also includes any of the foregoing criteria as calculated before any Bonus expense for that Year and/or before any store closing costs and impairment charges recognized in that Year.

 

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

 

“Committee” means the Compensation Committee of the Board of Directors or any successor committee which will administer the Plan in accordance with Section 3 of the Plan and Section 162(m) of the Code.

 

  

  

  

 

“Common Stock” means the Common Stock, par value $0.01 per share, of the Company.

 

“Company” means Shoe Carnival, Inc. and its consolidated subsidiaries, and any successor, whether by merger, ownership of all or substantially all of its assets or otherwise.

 

“Comparable Store Sales”  for any Year shall mean the comparable store sales value, expressed as a percent increase or decrease, as periodically reported by the Company in its press releases and filings with the Securities and Exchange Commission, or as otherwise calculated and disclosed to the Committee.

 

“EBITDA” for any Year means the consolidated net income before interest, income taxes, depreciation and amortization of the Company as reflected in the Company’s audited consolidated financial statements for the Year.

 

“EBITDA before Nonrecurring Items” for any Year means EBITDA of the Company before any extraordinary or unusual one-time nonrecurring expenses or other charges as reflected in the Company’s audited consolidated financial statements for the Year.

 

“EPS” for any Year means diluted Net Income per share of the Company, as reported in the Company’s audited consolidated financial statements for the Year.

 

“Executive” means a key employee (including any officer) of the Company.

 

“Net Income” for any Year means the consolidated net income of the Company, as reported in the Company’s audited consolidated financial statements for the Year.

 

“Net Income before Nonrecurring Items” for any Year means the Net Income of the Company before any extraordinary or unusual one-time nonrecurring expenses or other charges as reflected in the Company’s audited consolidated financial statements for the Year.

 

“Net Sales” for any Year means the Company’s total net sales as reported in the Company’s audited consolidated financial statements for the Year.

 

“Operating Income” for any Year means the operating income of the Company as reflected in the Company’s audited consolidated financial statements for the Year.

 

“Participant” means an Executive selected to participate in the Plan by the Committee.

 

“Performance Period” means the Year or Years with respect to which the Performance Targets are set by the Committee.

 

“Performance Target(s)” means the specific objective goal or goals (which may be cumulative and/or alternative) that are timely set in writing by the Committee for each Executive for the Performance Period in respect of any one or more of the Business Criteria.

 

“Plan” means this Shoe Carnival, Inc. 2016 Executive Incentive Compensation Plan, as amended from time to time.

 

“Return on Assets” for any Year means Net Income divided by the monthly average of total assets of the Company for the Year, as reflected in the Company’s consolidated financial statements for the Year.

 

 

  

  

  

“Return on Equity” for any Year means Net Income divided by the shareholders’ equity of the Company at the beginning of the Year, as reflected in the Company’s audited consolidated financial statements for the Year.

 

“Section 162(m)” means Section 162(m) of the Code, and the regulations promulgated thereunder, all as amended from time to time.

 

“Section 409A” means Section 409A of the Code, and the regulations promulgated thereunder, all as amended from time to time.

 

 “Year” means any one or more fiscal years of the Company commencing on or after January 31, 2016 and ending no later than January 30, 2021.

 

Section 3.    Administration of the Plan

 

          3.1    The Committee.    The Plan shall be administered by the Committee, which shall consist of at least three members of the Board of Directors of the Company, duly authorized by the Board of Directors of the Company to administer the Plan, who (i) are not eligible to participate in the Plan and (ii) are “outside directors” within the meaning of Section 162(m).

 

          3.2    Powers of the Committee.    The Committee shall have the sole authority to establish and administer the Performance Target(s) and the responsibility of determining from among the Executives those persons who will participate in and receive Bonuses under the Plan and, subject to Sections 4 and 5 of the Plan, the amount of such Bonuses and shall otherwise be responsible for the administration of the Plan, in accordance with its terms. The Committee shall have the authority to construe and interpret the Plan (except as otherwise provided herein) and any agreement or other document relating to any Bonus under the Plan, may adopt rules and regulations governing the administration of the Plan, and shall exercise all other duties and powers conferred on it by the Plan, or which are incidental or ancillary thereto. For each Performance Period, the Committee shall determine, at the time the Business Criteria and the Performance Target(s) are set, those Executives who are selected as Participants in the Plan.

 

          3.3    Requisite Action.    A majority (but not fewer than two) of the members of the Committee shall constitute a quorum. The vote of a majority of those present at a meeting at which a quorum is present or the unanimous written consent of the Committee shall constitute action by the Committee.

 

          3.4    Express Authority (and Limitations on Authority) to Change Terms and Conditions of Bonus.    Without limiting the Committee’s authority under other provisions of the Plan, but subject to any express limitations of the Plan and Section 5.8, the Committee shall have the authority to accelerate a Bonus (after the attainment of the applicable Performance Target(s)) and to waive restrictive conditions for a Bonus (including any forfeiture conditions, but not Performance Target(s)), in such circumstances as the Committee deems appropriate. In the case of any acceleration of a Bonus after the attainment of the applicable Performance Target(s), the amount payable shall be discounted to its present value using an interest rate equal to Moody’s Average Corporate Bond Yield for the month preceding the month in which such acceleration occurs.

 

Section 4.    Bonus Provisions

 

          4.1    Provision for Bonus.    Each Participant may receive a Bonus if and only if the Performance Target(s) established by the Committee, relative to the applicable Business Criteria, are attained. The applicable Performance Period and Performance Target(s) shall be determined by the Committee consistent with the terms of the Plan and Section 162(m). Notwithstanding the fact that the Performance Target(s) have been attained, the Company may pay a Bonus of less than the amount determined by the formula or standard established pursuant to Section 4.2 or may pay no Bonus at all, unless the Committee otherwise expressly provides by written contract or other written commitment.

 

  

  

  

 

          4.2    Selection of Performance Target(s).    The specific Performance Target(s) with respect to the Business Criteria must be established by the Committee in advance of the deadlines applicable under Section 162(m) and while the performance relating to the Performance Target(s) remains substantially uncertain within the meaning of Section 162(m). At the time the Performance Target(s) are selected, the Committee shall provide, in terms of an objective formula or standard for each Participant, and for any person who may become a Participant after the Performance Target(s) are set, the method of computing the specific amount that will represent the maximum amount of Bonus payable to the Participant if the Performance Target(s) are attained, subject to Sections 4.1, 4.3, 4.7, 5.1 and 5.8.

 

          4.3    Maximum Individual Bonus.    Notwithstanding any other provision hereof, no Executive shall receive a Bonus under the Plan for any Year in excess of $2 million or, if less, 200% of his or her Base Salary for the Year. No Executive shall receive aggregate bonuses under this Plan in excess of $10.0 million.

 

          4.4    Selection of Participants.    For each Performance Period, the Committee shall determine, at the time the Business Criteria and the Performance Target(s) are set, those Executives who will participate in the Plan.

 

          4.5    Effect of Mid-Year Commencement of Service.    To the extent compatible with Sections 4.2 and 5.8, if an Executive commences employment with the Company after the adoption of the Plan and the Performance Target(s) are established for a Performance Period, the Committee may grant to that Executive a Bonus for that Performance Period that is proportionately adjusted based on the period of actual service during such Performance Period.

 

          4.6    Accounting Changes.    Subject to Section 5.8, if, after the Performance Target(s) are established for a Performance Period, a change occurs in the applicable accounting principles or practices, the amount of the Bonuses paid under this Plan for such Performance Period shall be determined without regard to such change.

 

          4.7    Committee Discretion to Determine Bonuses.    The Committee has the sole discretion to determine the standard or formula pursuant to which each Participant’s Bonus shall be calculated (in accordance with Section 4.2), whether all or any portion of the amount so calculated will be paid, and the specific amount (if any) to be paid to each Participant, subject in all cases to the terms, conditions and limits of the Plan and of any other written commitment authorized by the Committee. In addition to the establishment of Performance Targets as provided in Section 4.2, the Committee may at any time establish additional conditions and terms of payment of Bonuses (including but not limited to the achievement of other financial, strategic or individual goals, which may be objective or subjective) as it may deem desirable in carrying out the purposes of the Plan and may take into account such other factors as it deems appropriate in administering any aspect of the Plan. The Committee may not, however, increase the maximum amount permitted to be paid to any individual under Section 4.2 or 4.3 of the Plan or award a Bonus under this Plan if the applicable Performance Target(s) have not been satisfied.

 

          4.8    Committee Certification.    No Participant shall receive any payment under the Plan unless the Committee has certified, by resolution or other appropriate action in writing, that the amount thereof has been accurately determined in accordance with the terms, conditions and limits of the Plan and that the Performance Target(s) and any other material terms previously established by the Committee or set forth in the Plan were in fact satisfied.

 

          4.9    Time of Payment.    Any Bonuses granted by the Committee under the Plan shall be paid in a single annual payment as soon as practicable following the latest of (a) the end of the applicable Year, (b) the Committee’s determinations under this Section 4 and (c) the certification of the Committee’s findings under Section 4.8, but in no event later than two and one half months following the last day of such Year (the “Payment Date”). Any such payment shall be in cash or cash equivalent, subject to applicable withholding requirements.

 

  

  

  

 

          4.10    Employment on Payment Date.     To be entitled to a Bonus payment under this Plan for any Year, the Executive must remain employed by the Company through the Payment Date for such Year. Notwithstanding the preceding sentence, however, if the Executive leaves employment with the Company prior to the Payment Date for such Year due to voluntary retirement on or after age 60, disability or death, the Executive shall remain eligible for a Bonus payment for any Year that had been completed prior to the Executive leaving employment, to the extent the Committee determines that the Executive is otherwise entitled to a Bonus for such Year under this Section 4. Such Bonus payment, if any, shall be paid in accordance with the provisions of Section 4.9.

 

Section 5.    General Provisions

 

          5.1    No Right to Bonus or Continued Employment.    Neither the establishment of the Plan nor the provision for or payment of any amounts hereunder nor any action of the Company (including, for purposes of this Section 5.1, any predecessor or subsidiary), the Board of Directors of the Company or the Committee in respect of the Plan, shall be held or construed to confer upon any person any legal right to receive, or any interest in, a Bonus or any other benefit under the Plan, or any legal right to be continued in the employ of the Company unless otherwise provided by the Committee by contract or agreement. The Company expressly reserves any and all rights to discharge an Executive in its sole discretion, without liability of any person, entity or governing body under the Plan or otherwise. Notwithstanding any other provision hereof and notwithstanding the fact that the Performance Target(s) have been attained and/or the individual maximum amounts pursuant to Section 4.2 have been calculated, the Company shall have no obligation to pay any Bonus hereunder nor to pay the maximum amount so calculated, unless the Committee otherwise expressly provides by written contract or other written commitment.

 

          5.2    Discretion of Company, Board of Directors and Committee.    Any decision made or action taken by the Company or by the Board of Directors of the Company or by the Committee arising out of or in connection with the creation, amendment, construction, administration, interpretation and effect of the Plan shall be within the absolute discretion of such entity and shall be conclusive and binding upon all persons. No member of the Committee shall have any personal liability for actions taken or omitted under the Plan by the member or any other person.

 

          5.3    Absence of Liability.    A member of the Board of Directors of the Company or a member of the Committee of the Company or any officer of the Company shall not be personally liable for any act or inaction hereunder, whether of commission or omission.

 

          5.4    No Funding of Plan.    The Company shall not be required to fund or otherwise segregate any cash or any other assets which may at any time be paid to Participants under the Plan. The Plan shall constitute an “unfunded” plan of the Company. The Company shall not, by any provisions of the Plan, be deemed to be a trustee of any property, and any obligations of the Company to any Participant under the Plan shall be those of a debtor and any rights of any Participant or former Participant shall be limited to those of a general unsecured creditor.

 

          5.5    Non-Transferability of Benefits and Interests.    Except as expressly provided by the Committee, no benefit payable under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any such attempted action shall be void and no such benefit shall be in any manner liable for or subject to debts, contracts, liabilities, engagements or torts of any Participant or former Participant. This Section 5.5 shall not apply to an assignment of a contingency or payment due after the death of the Executive to the deceased Executive’s legal representative or beneficiary.

 

  

  

  

 

          5.6    Law to Govern.    All questions pertaining to the construction, regulation, validity and effect of the provisions of the Plan shall be determined in accordance with the internal laws of the State of Indiana.

 

          5.7    Non-Exclusivity.    Subject to Section 5.8, the Plan does not limit the authority of the Company, the Board of Directors of the Company or the Committee, or any subsidiary of the Company, to grant awards or authorize any other compensation under any other plan or authority, including, without limitation, awards or other compensation based on the same Performance Target(s) used under the Plan.

 

          5.8    Section 162(m) Conditions; Bifurcation of Plan.    It is the intent of the Company that the Plan and Bonuses paid hereunder satisfy and be interpreted in a manner, that, in the case of Participants who are or may be persons whose compensation is subject to Section 162(m), satisfies any applicable requirements as performance-based compensation. Any provision, application or interpretation of the Plan inconsistent with this intent to satisfy the standards in Section 162(m) of the Code shall be disregarded. Notwithstanding anything to the contrary in the Plan, the provisions of the Plan may at any time be bifurcated by the Board of Directors of the Company or the Committee in any manner so that certain provisions of the Plan or any Bonus intended (or required in order) to satisfy the applicable requirements of Section 162(m) are only applicable to persons whose compensation is subject to Section 162(m).

 

          5.9    Section 409A Compliance.     It is the intent of the Company that any Bonus payable under this Plan be exempt from the requirements of Section 409A to the maximum extent possible, including pursuant to the short-term deferral exception described in Treasury Regulation 1.409A-1(b)(4). However, to the extent Section 409A is applicable to a Bonus paid under this Plan, the Company intends that the payment of such Bonus comply with any applicable limitations, restrictions and requirements of Section 409A.

 

Section 6.    Amendments, Suspension or Termination of Plan

 

          Except as otherwise expressly agreed to in writing by the Committee, the Board of Directors of the Company or the Committee may, from time to time amend, suspend or terminate, in whole or in part, the Plan, and if suspended or terminated, may reinstate any or all of the provisions of the Plan; provided no amendment, suspension or termination of the Plan shall in any manner affect any Bonus theretofore granted pursuant to the Plan (whether or not the applicable Performance Targets have been attained) without the consent of the Participant to whom the Bonus was granted. Notwithstanding the foregoing, no amendment may be effective without the approval of the Board of Directors of the Company and/or shareholder approval if such approval is necessary to comply with the applicable rules under Section 162(m) of the Code.

 

 

 

Approved by the Board of Directors of

Shoe Carnival, Inc.

as of March 15, 2016

Approved by the Shareholders of

Shoe Carnival, Inc.

as of June 16, 2016

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