Document:

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                                                                   EXHIBIT 10.18
                           TOWER FINANCIAL CORPORATION
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

          Tower Financial Corporation (sometimes referred to as the "Company")
hereby establishes this Supplemental Executive Retirement Plan, effective as of
January 1, 2002, as an unfunded, non-qualified plan for the payment of deferred
compensation to certain executive employees, in recognition of their substantial
contributions to the operation of Tower Financial Corporation and affiliates and
to provide them with additional incentives to enhance Tower Financial
Corporation and its programs.

                                   ARTICLE I
                      DEFINITIONS AND RULES OF CONSTRUCTION

     Section 1.1. Definitions. As used in the Plan, the following words and
phrases, when capitalized, have the following meanings:

          (a)  "Accrued Benefit" means, with respect to a Participant, a series
     of equal monthly payments, commencing at the Participant's Normal
     Retirement Date and continuing until his death, each in the following
     amount:

               (1) the Participant's Average Monthly Compensation multiplied by
          the Benefit Factor, less

               (2) the value of the Actuarial Equivalent of the Participant's
          Social Security Offset.

     Notwithstanding the foregoing, in no event shall Participant's Accrued
     Benefit exceed Eight Thousand Three Hundred Thirty-Three Dollars
     ($8,333.00) per month.

          (b)  "Actuarial Equivalent" means, with respect to a benefit under the
     Plan, an actuarially equivalent benefit determined using (i) the 1983 Group
     Annuity Mortality Table - Weighted 50 Percent Male and 50 Percent Female
     and (ii) the 30-year U.S. Treasury rate in effect during the month of
     November preceding the year the benefit determination occurs.

          (c)  "Affiliate" means any employer that, together with Tower
     Financial Corporation, is under common control or a member of an affiliated
     service group, as determined under Code subsections 414(b), (c), (m), and
     (o).

          (d)  "Average Monthly Compensation" means, with respect to a
     Participant, the average of the Participant's monthly Compensation for the
     thirty-six (36) consecutive calendar months that produces the highest
     average during the ten (10) year period immediately before the earlier of
     the Participant's Normal Retirement Date, date of death, Disability date or
     Plan termination.

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          (e)  "Beneficiary" means, with respect to each Participant, the person
     or persons designated pursuant to Section 3.8 to receive benefits under the
     Plan in the event of his death.

          (f)  "Benefit Factor" for a Plan Year means twenty-five percent (25%),
     plus two percent (2%) for each Year of Service completed by the
     Participant. The Benefit Factor shall not exceed thirty-five percent (35%).

          (g)  "Board of Directors" means the Board of Directors of Tower
     Financial Corporation.

          (h)  "Cause" means, with respect to an Employment Termination, (1)
     commission by the Employee of a felony or other serious crime or (2)
     fraudulent or dishonest conduct by the Employee intended to benefit the
     Employee at the expense of Tower Financial Corporation or an Affiliate.

          (i)  "Change of Control" means a change in ownership or governance of
     Tower Financial Corporation prescribed in Section 3.9.

          (j)  "Code" means the Internal Revenue Code of 1986, as amended, and
     its interpretive rules and regulations.

          (k)  "Commencement Date" means, with respect to a Participant, the
     date that the payment of the Participant's benefit under the Plan
     commences, as provided in Article III.

          (l)  "Compensation" means, with respect to a Participant, the monthly
     base compensation payable to the Executive, without regard Code Section
     401(a)(17), plus any salary-reduction contributions to non-qualified plans
     attributable to such base compensation. Compensation specifically excludes
     any bonuses, imputed income, and any amounts recognized for the granting or
     exercising of options.

          (m)  The Compensation Committee means the Compensation Committee of
     the Board of Directors.

          (n)  "Disability" means a Participant's disability as determined under
     the long-term disability plan maintained by Tower Bank & Trust Company.

          (o)  "Early Retirement Date" means, with respect to a Participant, the
     first day of the month beginning on or after the date the Participant both
     attains age 65.

          (p)  "Employee" means any person employed by Tower Financial
     Corporation or an Affiliate on a full-time, salaried basis.

          (q)  "Employment Termination" means the cessation of a Participant's
     or former Participant's status as an Employee for any reason. A Participant
     shall be deemed

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     to be an Employee for purposes of this Plan if he receives any remuneration
     or fees from Company or consulting services or Board membership.

          (r)  "Normal Retirement Date" means, with respect to a Participant,
     the first day of the month beginning on or after the date the Participant
     attains age 70.

          (s)  "Officer" means an Employee who is serving in a key management
     position for Tower Financial Corporation or an Affiliate that the Board of
     Directors designates as a position eligible for Plan participation.

          (t)  "Participant" means a key management Employee who is selected by
     the Compensation Committee to participate in the Plan pursuant to Section
     2.1 and listed in the Appendix.

          (u)  "Plan" means this instrument, as amended from time to time, and
     the non-qualified supplement retirement plan established by this
     instrument.

          (v)  "Plan Year" means January 1, 2002, to December 31, 2002, and
     thereafter the calendar year.

          (w)  "Social Security Offset" means the Participant's unreduced
     primary insurance amount payable at the Participant's normal retirement
     age, as provided under section 202 of the Social Security Act as in effect
     at the time the Social Security Offset is determined.

          (x)  "Year of Service" means, with respect to a Participant, the
     number of complete Plan Years that the Participant is employed by the
     Company after the effective date of the Plan.

     Section 1.2. Rules of Construction. The following rules of construction
shall govern in interpreting the Plan:

          (f)  The Plan is intended to be an unfunded deferred compensation plan
     for a select group of management or highly compensated employees that is
     exempt from Parts 2, 3, and 4 of Subtitle B of Title I of the Employee
     Retirement Income Security Act of 1974.

          (g)  The provisions of this Plan shall be construed and governed in
     all respects under and by the internal laws of the State of Indiana.

          (h)  If any provision of the Plan is held to be illegal or invalid for
     any reason, that provision shall be void, but the voiding of that provision
     shall not otherwise impair or affect the remaining provisions of the Plan.

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                                   ARTICLE II
                                  PARTICIPATION

     Section 2.1. Commencement of Participation. The Compensation Committee
shall designate each Employee who is to become a Participant by resolution of
the Board of Directors and by identifying the Employee as a Participant on the
attached Appendix.

     Section 2.2. Termination of Participation. Once designated a Participant,
an Employee shall continue to be a Participant until (a) the Compensation
Committee determines that he shall cease to be a Participant, (b) his Employment
Termination or Disability, or (c) the termination of the Plan, whichever occurs
first.

                                   ARTICLE III
                                FORMS OF BENEFIT

     Section 3.1. Normal Retirement Benefit. If a Participant incurs an
Employment Termination after attaining age 65 but before his Normal Retirement
Date, his Plan benefits shall be paid in a series of monthly installments in the
amount of his Accrued Benefit, commencing on the 1st day of the month following
the later of his Normal Retirement Date and continuing until his death.

     Section 3.2. Delayed Retirement Benefit. If a Participant incurs an
Employment Termination after his Normal Retirement Date, his Plan benefits shall
be paid in a series of monthly installments in an amount that is the Actuarial
Equivalent of his Accrued Benefit, commencing on the first day of the month
following his Employment Termination and continuing until his death.

     Section 3.3. Disability Benefit. If a Participant incurs a Disability while
an Employee, his Plan benefit shall be paid in a series of monthly installments,
each in an amount that is the Actuarial Equivalent of his Accrued Benefit,
commencing on the first day of the month following the effective date of his
Disability and continuing until his death.

     Section 3.4. Death Benefit.

          (a)  If a Participant dies while an Employee, his Accrued Benefit
     shall be paid to his Beneficiary, commencing as soon as administratively
     feasible following his death, in a lump sum amount that is the Actuarial
     Equivalent of his Accrued Benefit.

          (b)  If a Participant dies while receiving benefits under this Plan,
     no further benefits shall be paid under this Plan.

     Section 3.5. Employment Termination Benefit. If a Participant incurs an
Employment Termination before his Normal Retirement Date, his Plan benefit shall
be as follows:

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          (a)  Except as specifically provided in Sections 3.3, 3.4 and 3.9, the
     Participant shall not be entitled to any benefit under the Plan if his
     employment is terminated prior to reaching his 65th birthday.

          (b)  Solely with respect to Donald Schenkel, if the Company does not
     retain the him pursuant to Article XIII of that certain employment contract
     between the Company and Donald Schenkel without Cause, then the monthly
     Accrued Benefit shall commence within 30 days of the date the Company
     provides written notice to Schenkel. The Accrued Benefit payable under this
     Paragraph (b) shall not be actuarially reduced for early payment.

          (c)  Notwithstanding any to the contrary set forth in this Plan, if
     the Employment Termination is initiated by Tower Financial Corporation For
     Cause, the Participant's benefits under the Plan shall be forfeited.

     Section 3.6. Termination of the Plan by the Company. Upon termination of
the Plan by the Company, each Participant shall be entitled to a benefits under
the Plan as follows:

          (a)  If the Company terminates the Plan within twelve (12) months
     following a Change of Control, each Participant's Plan benefit shall be
     paid, as soon as administratively feasible after Plan termination, in a
     single, lump-sum amount that is the Actuarial Equivalent of his Accrued
     Benefit.

          (b)  If the Company terminates the Plan under any other circumstance,
     each Participant's Accrued Benefit shall be frozen, and his Plan benefit
     shall be paid to him or, in the event of his death, to his Beneficiary at
     the same time, and in the same form and amount, that his Plan benefit would
     have been paid had the Plan not been terminated.

     Section 3.7. Benefits for a Former Participant. If the Company determines
that a Participant shall cease to participate in the Plan before he has begun to
receive his Plan benefit, the Participant's Accrued Benefit shall be frozen, and
his Plan benefit shall be paid to him or, in the event of his death, to his
Beneficiary at the same time, and in the same form and amount, that his Plan
benefit would have been paid had he remained a Participant until his death,
Disability, Employment Termination, or Plan termination, whichever is
applicable.

     Section 3.8. Designation of Beneficiary. In accordance with procedures
prescribed by the Company, each Participant shall designate as Beneficiary the
person or persons, including a trustee, to receive any Accrued Benefit payable
under Section 3.4 following his death. If the Participant does not designate a
Beneficiary, or if no designated Beneficiary survives the Participant, his
Beneficiary shall be his estate.

     Section 3.9. Change of Control.

          (a)  For purposes of the Plan, a Change of Control will have the
     following meaning:

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               (i) A reorganization, merger, consolidation or other form of
          corporate transaction or series of transactions, in each case, with
          respect to which persons who were the stockholders of the Company
          immediately prior to such reorganization, directly or indirectly, own
          less than fifty percent (50%) of the combined voting power entitled to
          vote generally in the election of directors of the reorganized, merged
          or consolidated entity's then outstanding voting securities;

               (ii) A liquidation or dissolution of the Company;

               (iii) The acquisition by any person, entity or "group," within
          the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
          Act of 1934, (excluding any employee benefit plan of the Company or
          its subsidiaries which acquires beneficial ownership (within the
          meaning of Rule 13d-3 promulgated under the Securities Exchange Act)
          of more than fifty percent (50%) of either the then outstanding shares
          of common stock or the combined voting power of the Company's then
          outstanding voting securities entitled to vote generally in the
          election of directors; or

               (iv) As the result of, or in connection with, any tender or
          exchange offer, merger, consolidation or other business combination,
          sale or disposition of all or substantially all of the Company's
          assets, or contested election, or any combination of the foregoing
          transactions (a "Transaction"), the persons who were directors of the
          Company immediately before the Transaction shall cease to constitute a
          majority of the Board of Directors of the Company or any successor to
          the Company.

          (b)  Notwithstanding anything to the contrary contained herein, if a
     Participant is terminated by the Company or his authority and
     responsibility are substantially reduced, without Cause within three (3)
     months prior or twelve (12) months after a Change in Control, the present
     value of the Participant's Accrued Benefit shall be paid in a single lump
     sum distribution within sixty (60) days of his date of termination.

                                   ARTICLE IV
                                     FUNDING

     Section 4.1. Plan Unfunded. The obligation to pay benefits under the Plan
represents only a contractual obligation of the Company to make payments when
due. Tower Bank & Trust Company's obligation to pay benefits shall not be
secured in any way, and neither shall set aside assets beyond the reach of their
general creditors for the purpose of paying benefits under the Plan.

     Section 4.2. Insurance Contracts. The Company may determine, in its sole
discretion, to purchase one or more life insurance contracts on the
Participant's life as a means of reserving assets to pay its obligations under
the Plan. In that event, the Participant shall, as a condition to receiving any
benefits under the Plan, consent to the purchase of that insurance, execute any

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application or other forms that the insurer reasonably requires, and make other
reasonable efforts to permit the Company to obtain that insurance.

                                    ARTICLE V
                                 ADMINISTRATION

     Section 5.1. Tower Financial Corporation. Tower Financial Corporation shall
administer the Plan and may delegate all or a portion of its responsibility to
such individuals as it deems appropriate.

     Section 5.2. Notices. Any notice to the Company under the Plan shall be
sufficient if it is in writing and delivered by hand or sent by registered or
certified mail, return receipt requested, to the Board of Directors. Any notice
to a Participant or his Beneficiary under the Plan shall be sufficient if it is
in writing and delivered by hand or sent by registered or certified mail, return
receipt requested, to the Participant or, in the event of his death, to the
Beneficiary. Any notice shall be deemed made as of the date of delivery by hand
or the mailing date shown on the return receipt for registered or certified
mail.

     Section 5.3. Powers and Duties of the Company. Subject to the specific
limitations stated in this Plan, the Company shall have the following powers,
duties, and responsibilities:

          (a)  To carry out the general administration of the Plan;

          (b)  To cause to be prepared all forms necessary or appropriate for
     the administration of the Plan;

          (c)  To keep appropriate books and records;

          (d)  To determine amounts to be distributed to a Participant and his
     Beneficiary under the provisions of the Plan;

          (e)  To determine, consistently with the provisions of this
     instrument, all questions of eligibility, rights, and status of each
     Participant and his Beneficiary under the Plan;

          (f)  To issue, amend, and rescind rules relating to the administration
     of the Plan, to the extent those rules are consistent with the provisions
     of this instrument;

          (g)  To exercise all other powers and duties specifically conferred
     upon Tower Bank & Trust Company elsewhere in this instrument; and

          (h)  To interpret, with discretionary authority, the provisions of
     this Plan and to resolve, with discretionary authority, all disputed
     questions of Plan interpretation and benefit eligibility.

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                                   ARTICLE VI
                            AMENDMENT AND TERMINATION

     Section 6.1. Amendment. The Company may amend the Plan at any time by
action of the Board of Directors, with written notice to each Participant. The
Company, however, may not make any amendment that reduces a Participant's
benefits below amounts already earned or that delays the payment of those
benefits past the time provided under the Plan immediately before the date of
the amendment, unless the Participant consents in writing to the amendment.

     Section 6.2. Termination. The Company reserves the right to terminate the
Plan, by action of the Board of Directors, at any time it deems appropriate.
Upon termination of the Plan, no further benefits shall be earned under the Plan

                                   ARTICLE VII
                                  MISCELLANEOUS

     Section 7.1. Relationship. Notwithstanding any other provision of this
Plan, this Plan and action taken pursuant to it shall not be deemed to establish
a trust or fiduciary relationship of any kind between the Company and any
Participant or his Beneficiary. The Plan is intended to be unfunded for purposes
of the Employee Retirement Income Security Act of 1974, as amended. The Plan
shall not be deemed to grant a Participant, his Beneficiary, or any other person
any interest or right in any property of the Company other than as an unsecured
general creditor of the Company.

     Section 7.2. Anticipation of Benefits. Neither a Participant nor his
Beneficiary shall have the power to transfer, assign, anticipate, pledge,
alienate, or otherwise encumber in advance any of the payments that may become
due under this Plan, and any attempt to do so shall be void. Any payments that
may become due under this Plan shall not be subject to attachment, garnishment,
execution, or be transferable by operation of law in the event of bankruptcy,
insolvency, or otherwise.

     Section 7.3. No Guarantee of Continued Employment. Nothing contained in
this Plan or any action taken under the Plan shall be construed as a contract of
employment or as giving a Participant any right to be retained in employment
with the Company.

     Section 7.4. Persons Subject to the Plan. This Plan shall be binding upon
and inure to the benefit of each Participant and his Beneficiaries and upon the
Company and their successors and assigns.

     Section 7.5. Responsibility for Tax Status. The Company does not make any
warranties, express or implied, or assume any responsibility concerning the
federal, state, or local taxation of rights or benefits under the Plan.

     Section 7.6. Tax Withholding. The Company may withhold from each
Participant's compensation or from any benefit paid under the Plan such amounts
as may be required by applicable federal, state, or local tax laws.

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          Tower Financial Corporation has caused this Plan to be executed by its
duly authorized officers on the 7th day of January, 2002.

                                        Tower Financial Corporation

                                        By: /s/ Kevin J. Himmelhaver
                                            ----------------------------

                                        Title: EVP/CFO
                                               -------------------------

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                                    APPENDIX

     The Compensation Committee has designated the following individuals as
Participants in the Supplemental Executive Retirement Plan of Tower Financial
Corporation:

          Name                          Effective Date of Participation
          ----                          -------------------------------

          Donald F. Schenkel            January 1, 2002

                                        Certified by:

                                        /s/ Craig S. Hartman    January 10, 2002
                                        ----------------------------------------
                                            Craig Hartman             Date

                                        (Initial and date)

                                       10<PAGE>
                                                                   EXHIBIT 10.19

                           DEFERRED COMPENSATION PLAN
                         OF TOWER FINANCIAL CORPORATION

                                    ARTICLE I
                                     PURPOSE

                  Tower Financial Corporation (the "Company") hereby establishes
the Deferred Compensation Plan of Tower Financial Corporation (the "Plan"),
effective as of January 1, 2002. The purpose of the Plan is to provide a means
for the payment of unfunded, deferred compensation to a select group of key
management executives of the Company and Related Employers (collectively
referred to as the "Employer") in recognition of their substantial contributions
to the operation of the Employer, and to provide those executives with
additional financial opportunity as an inducement to remain in the employment of
the Employer.

                                   ARTICLE II
                      DEFINITIONS AND RULES OF CONSTRUCTION

                  Section 2.1. Definitions. As used in the Plan, the following
words and phrases, when capitalized, have the following meanings, except when
used in a context that plainly requires a different meaning:

                  (a) "Accounts" means the Deferral Account and the Employer
         Contribution Sub-Accounts.

                  (b) "Beneficiary" means the beneficiary or beneficiaries
         designated by a Participant in writing to receive the payment of
         benefits provided under this Plan following the Participant's death. In
         the absence of a designation, the Beneficiary shall be the
         Participant's spouse, if the spouse survives the Participant, or if the
         spouse does not survive the Participant or the Participant is not
         married, then the Participant's estate.

                  (c) "Board of Directors" means the Board of Directors of the
         Company.

                  (d) "Change of Control" means:

                           (i) A reorganization, merger, consolidation or other
                  form of corporate transaction or series of transactions, in
                  each case, with respect to which persons who were the
                  stockholders of the Company immediately prior to such
                  reorganization, directly or indirectly, own less than fifty
                  percent (50%) of the combined voting power entitled to vote
                  generally in the election of directors of the reorganized,
                  merged or consolidated entity's then outstanding voting
                  securities;

                           (ii)     A liquidation or dissolution of the Company;

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                           (iii) The acquisition by any person, entity or
                  "group," within the meaning of Section 13(d)(3) or 14(d)(2) of
                  the Securities Exchange Act of 1934, (excluding any employee
                  benefit plan of the Company or its subsidiaries which acquires
                  beneficial ownership (within the meaning of Rule 13d-3
                  promulgated under the Securities Exchange Act) of more than
                  fifty percent (50%) of either the then outstanding shares of
                  common stock or the combined voting power of the Company's
                  then outstanding voting securities entitled to vote generally
                  in the election of directors; or

                           (iv) As the result of, or in connection with, any
                  tender or exchange offer, merger, consolidation or other
                  business combination, sale or disposition of all or
                  substantially all of the Company's assets, or contested
                  election, or any combination of the foregoing transactions (a
                  "Transaction"), the persons who were directors of the Company
                  immediately before the Transaction shall cease to constitute a
                  majority of the Board of Directors of the Company or any
                  successor to the Company.

                  (e) "Company" means Tower Financial Corporation.

                  (f) "Compensation" means, with respect to an Eligible
         Participant, compensation (as defined in paragraph 415(c)(3) of the
         Internal Revenue Code of 1986, as amended) paid by the Employer to an
         Eligible Participant during the Plan Year, plus election deferrals to
         any Company 401(k) plan and salary reduction contributions under the
         Company's Flexible Benefits Plan, and any amounts deferred by an
         Eligible Participant under this Plan.

                  (g) "Compensation Committee" means the Compensation Committee
         of the Board of Directors.

                  (h) "Deferral Account" means the bookkeeping entry which
         accounts for the cumulative amount of Compensation, which an Eligible
         Participant has deferred in accordance with Section 4.1, adjusted for
         any earnings.

                  (i) "Deferral Agreement" means the written agreement between
         the Employer and the Participant pursuant to which the Participant
         elects to defer Compensation under the Plan.

                  (j) "Earnings Rate" means four percent (4%) per annum, except
         as provided for in Section 6.2(b).

                  (k) "Eligible Participant" means, with respect to a Plan Year,
         a Participant who is eligible to have his Account credited with
         contributions for that Plan Year pursuant to Articles IV and V.

                  (l) "Employer Contribution" means the contributions, if any,
         credited by the Employer pursuant to Section 5.1.

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                  (m) "Employer Contribution Sub-Account" means the bookkeeping
         entry which accounts for each Participant's total Employer Contribution
         for each specific Plan Year credited, adjusted for any earnings or
         losses attributable to such account.

                  (n) "Executive" means a key management employee of the
         Employer who has the opportunity to impact significantly the annual
         operating success of the Company or a Related Employer.

                  (o) "Incentive Compensation Plan" means the Company's bonus
         program.

                  (p) "Participant" means an Executive selected by the Board of
         Directors to participate in the Plan pursuant to Section 3.1.

                  (q) "Plan Year" means January 1, 2002 through December 31
         2002, and each calendar year thereafter.

                  (r) "Related Employer" means a subsidiary of the Company.

                  (s) "Retirement" means the voluntary Termination of Employment
         by a Participant who has reached at least age 65.

                  (t) "Termination of Employment" means the cessation of the
         relationship of employer and employee between the Employer and the
         Participant by reason of death, resignation or discharge. A Participant
         shall not be treated as having incurred a Termination of Employment
         until the employment relationship between the Participant and all
         Related Employers has terminated.

                  (u) "Total Disability" means the individual has been found by
         the insurance company providing the group long-term disability policy
         for the Company to be entitled to benefits as a result of Total
         Disability, as therein defined.

                  (v) "Total Disability Date" means the date upon which a
         Participant's Total Disability benefits under the Company's group
         long-term disability policy commence.

                  (w) "Unaffiliated Entity" means an individual, entity, or
         group (within the meaning of section 13(d)(3) or 14(d)(2) of the
         Securities Exchange Act of 1934), except the Company, a legal entity of
         which the Company owns at least 60% of the beneficial ownership, or an
         employee benefit plan maintained by the Company.

                  Section 2.2. Rules of Construction. The following rules of
construction shall govern in interpreting the Plan:

                  (a) The provisions of the Plan shall be construed and governed
         in all respects under and by the internal laws of the State of Indiana,
         to the extent not preempted by federal law.

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<PAGE>

                  (b) Words used in the masculine gender shall be construed to
         include the feminine gender, where appropriate, and vice versa.

                  (c) Words used in the singular shall be construed to include
         the plural, where appropriate, and vice versa.

                  (d) The headings and subheadings in the Plan are inserted for
         convenience of reference only and are not to be considered in the
         construction of any provision of the Plan.

                  (e) If any provision of the Plan shall be held to be illegal
         or invalid for any reason, that provision shall be deemed to be null
         and void, but the invalidation of that provision shall not otherwise
         impair or affect the Plan.

                  (f) The Plan is intended to be an unfunded deferred
         compensation plan for a select group of management or highly
         compensated employees that is exempt from Parts 2, 3, and 4 of Subtitle
         B of Title I of the Employee Retirement Income Security Act of 1974.

                                   ARTICLE III
                                  PARTICIPATION

                  Section 3.1. Commencement of Participation. The Compensation
Committee shall designate each Executive who is to become an Eligible
Participant by resolution of such committee and by identifying the Executive as
an Eligible Participant on the attached Appendix.

                  Section 3.2. Termination of Participation. At any time, the
Compensation Committee may determine that an Executive shall cease to be an
Eligible Participant. In that event, the Executive shall not receive further
contributions to his Account, but he shall continue as a Participant and shall
continue to have earnings allocated to his Account, until his Accounts have been
distributed or forfeited in full.

                                   ARTICLE IV
                            DEFERRAL OF COMPENSATION

         The provisions of this Article IV shall not be effective unless and
until so approved by the Compensation Committee of the Board of Directors of the
Company.

                  Section 4.1. Election to Defer Compensation. For the Plan Year
beginning on __________, 200__, and each January 1 thereafter, and before the
Participant's Termination of Employment, a Participant may make separate
elections to defer up to 90% of his base Compensation and 90% of his bonus, if
any, for such Plan Year.

                  Section 4.2. Deferral Agreement. Filing a completed Deferral
Agreement with the Company before the first day of that Plan Year completes a
Participant's deferral election for the Plan Year. The Company shall provide
each Participant with a Deferral Agreement within a

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<PAGE>
reasonable period of time before the beginning of each Plan Year. An election
made pursuant to this Section shall be effective as of the first day of the Plan
Year following the Company's receipt of the election and shall be irrevocable
for the Plan Year.

                  Section 4.3.  Taxes and Recordkeeping.

                  (a) Notwithstanding any of the foregoing, a Participant must
         be entitled to receive sufficient Compensation to pay any and all taxes
         incurred as a result of his deferral, including, but not limited to,
         social security taxes.

                  (b) At the end of each calendar quarter, the Employer shall
         credit to the Participant's Deferral Account all amounts deferred by
         him during such period.

                                    ARTICLE V
                      EMPLOYER DISCRETIONARY CONTRIBUTIONS

                  The Compensation Committee, in its sole discretion, may credit
an amount to a Participant's Employer Contribution Sub-Account at any time or
times during a Plan Year. A separate Employer Contribution Sub-Account shall be
established for each Plan Year in which the Company makes a credit.
Notwithstanding the foregoing, a Participant may not be credited with an amount
that exceeds twenty percent (20%) of his actual bonus under the Incentive
Compensation Plan for such Plan Year, unless approved by the Board of Directors.

                                   ARTICLE VI
                             PARTICIPANTS' ACCOUNTS

                  Section 6.1. Accounts. The Company shall create and maintain
adequate records to disclose the interest in the Plan of each Participant and
Beneficiary. Records shall be in the form of individual bookkeeping accounts.
Each Participant shall have a separate Deferral Account and Employer
Contribution Sub-Accounts.

                  Section 6.2.  Earnings.

                  (a) At the end of each calendar quarter, each Participant's
         Deferral and each Employer Contribution Sub-Account, including any
         amount credited on the last day of such quarter, shall be credited with
         the Earnings Rate.

                  (b) Notwithstanding the foregoing, the Company may, from time
         to time, offer investment options, the performance of which will be
         deemed to be the Earnings Rate, to the extent selected by a
         Participant. The deemed investment of a Participant among the
         investment options is solely a measure of the investment performance of
         the Account. It does not give the Participant any ownership interest in
         any investment option, nor does it bind the Company or the trustee, if
         applicable, as to the investment of any Rabbi Trust or any other
         amounts represented by the Account. The Company shall adopt procedures
         to administer such investment options.

                                       5
<PAGE>
                  Section 6.3. Valuation of Accounts. The value of a
Participant's Accounts as of any date shall equal the dollar amount of the
Participant's deferrals made pursuant to Section 4.1 and the Employer's credits
pursuant to Article V, adjusted pursuant to Section 6.2, and decreased by the
amount of any payments made from the respective Accounts to the Participant or
his Beneficiary.

                  Section 6.4. Annual Report. Within 90 days following the end
of each Plan Year, the Company shall provide to each Participant a written
statement of the amount credited to each of his separate Accounts as of the end
of that year.

                                   ARTICLE VII
                                     VESTING

                  Section 7.1.  Vesting.

                  (a) A Participant shall always be 100% vested in his Deferral
         Account.

                  (b) Subject to Article VIII, a Participant shall vest in an
         Employer Contribution Sub-Account upon the completion of four (4) Years
         of Vesting Service. For purposes of determining Years of Vesting
         Service, any service prior to the establishment of each respective
         Employer Contribution Sub-Account shall be disregarded.

                  By way of clarification, if a Participant receives an Employer
         Contribution for Plan Year 2001 and Plan Year 2002, he would fully vest
         on December 31, 2004, for the Plan Year 2001 Sub-Account (including
         earnings) and December 31, 2005, for Plan Year 2002 Sub-Account,
         respectively, assuming he continued working for the Company.

                  Section 7.2. Accelerated Vesting. Subject to Article VIII, in
the event of death, Retirement, Total Disability or termination of the Plan, any
unvested portion of Employer Contribution Sub-Accounts shall become 100% vested.

                  Section 7.3. Year of Vesting Service. For purposes of each
Employer Contribution Sub-Account, Participant shall be credited with one Year
of Vesting Service for each complete Plan Year he is actively employed by the
Employer and is a Participant in the Plan. For each sub-account, service prior
to the establishment of such Employer Contribution Sub-Account shall be
disregarded.

                                  ARTICLE VIII
                        RELEASE AGREEMENT AND FORFEITURE

                  Section 8.1. Release. Notwithstanding anything to the contrary
contained herein, a Participant must execute a Release (the "Agreement") prior
to the distribution of any amount from the Employer Contribution Sub-Accounts,
substantially in the form attached hereto as Exhibit "A." The Company reserves
the right to modify the Agreement on an individual basis. In the event a
Participant fails to execute the Agreement within fifteen

                                       6
<PAGE>
(15) days of his Termination of Employment for any reason other than death, his
Employer Contribution Sub-Accounts shall be immediately forfeited.

                  Section 8.2. Forfeiture For Cause.If a Participant is
terminated "For Cause," as herein defined, any and all amounts credited to his
Employer Contribution Sub-Account shall be immediately forfeited. "For Cause"
means any termination by the Company for any civil or criminal conduct that
causes harm, financial or otherwise, to the Company, including, but not limited
to, any breach of the terms of a Participant's employment agreement with the
Company or its subsidiary, if any. The Company has the sole discretion to
determine what acts or omissions constitute For Cause. In the event the Company
determines that it had grounds to terminate For Cause, it shall notify the
Participant of the finding and forfeiture of his Employer Contribution
Sub-Accounts.

                                   ARTICLE IX
                        PAYMENT OF DEFERRED COMPENSATION

                  Section 9.1. Termination of Employment or Total Disability
Benefit.

                  (a) Upon a Participant's Termination of Employment or his
         Total Disability Date, his vested Accounts shall be distributed in five
         (5) annual installments as provided in Subsection 9.1(b). The first
         annual installment shall be paid as soon as administratively possible,
         but in no event later than ninety (90) days following the Participant's
         Termination of Employment or his Total Disability Date, and subsequent
         annual installments shall be paid on the anniversary of the initial
         payment.

                  (b) Each annual installment shall be equal to the remaining
         vested Account, determined as of the first day of the month preceding
         the distribution date, multiplied by the following respective percent:

                  First Annual Installment  20%
                  Second Annual Installment 25%
                  Third Annual Installment  50%
                  Fourth Annual Installment 75%
                  Fifth Annual Installment  100%

                  (c) Notwithstanding the foregoing, if, and only if, a
         Participant's balance in his Accounts is less than $100,000 on his
         Termination of Employment or Total Disability Date, then the entire
         balance shall be paid in a single lump-sum as soon as administratively
         feasible, but in no event later than ninety (90) days after such date.

                                       7
<PAGE>
                  Section 9.2.  Distribution Upon Death.

                  (a) In the event a Participant dies prior to the commencement
         of benefits under the Plan, his Beneficiary shall receive benefits as
         follows:

                           (1) If the Participant's Accounts are less than One
                  Hundred Thousand Dollars ($100,000.00) as of the date of his
                  death, the Accounts shall be distributed in full as soon as
                  administratively feasible, but in no event later than ninety
                  (90) days after the date that the Company was notified of his
                  death.

                           (2) In the event the Participant's Accounts are in
                  excess of One Hundred Thousand Dollars ($100,000.00) as of the
                  date of his death, the Beneficiary shall receive a
                  distribution in accordance with Subsection 9.1(b).

                  (b) In the event a Participant has commenced receiving
         benefits and subsequently dies, his Beneficiary shall be entitled to
         receive the remainder of the annual installments in accordance with the
         schedule set forth in Section 9.1(b).

                  Section 9.3. Change in Control. In the event a Participant is
terminated or his job responsibilities or compensation substantially reduced,
within twelve (12) months of a Change in Control, without Cause, as determined
by the Compensation Committee, a Participant's entire Account shall become
immediately one hundred percent (100%) vested and shall be distributed to him
within sixty (60) days after the later of his Termination of Employment or the
Change in Control.

                                    ARTICLE X
                                 ADMINISTRATION

                  Section 10.1. Administrator. The Company shall be the
Administrator of the Plan.

                  Section 10.2. Powers and Duties of the Administrator . Subject
to the specific limitations stated in this Plan, the Administrator shall have
the following powers and duties:

                  (a) to carry out the general administration of the Plan;

                  (b) to cause to be prepared all forms necessary or appropriate
         for the administration of the Plan;

                  (c) to keep appropriate books and records;

                  (d) to determine amounts to be disbursed to Participants and
         others under the provisions of the Plan;

                  (e) to determine, consistent with the provisions of this
         instrument, all questions of eligibility, rights, and status of
         Participants and others under the Plan;

                                       8
<PAGE>
                  (f) to exercise all other powers and duties specifically
         conferred upon the Administrator elsewhere in this instrument;

                  (g) to interpret, with discretionary authority, the provisions
         of this Plan and to resolve, with discretionary authority, all disputed
         questions of Plan interpretation and benefit eligibility;

                  (h) to incur reasonable expenses in the performance of its
         duties; and

                  (i) to delegate any of its powers and/or duties, including its
         discretionary authority, to the Company.

                  Section 10.3. Correction of Defects. The Administrator may
correct any defect or supply any omission or reconcile any error or
inconsistency in its previous proceedings, decisions, orders, directions, or
other actions in such manner and to such extent as it shall deem advisable to
carry out the purposes of the Plan.

                                   ARTICLE XI
                                     FUNDING

                  Section 11.1. Plan Unfunded. The obligation to pay benefits
under the Plan represents only a contractual obligation of the Company to make
payments when due. The Company's obligation to pay benefits shall not be secured
in any way, and neither shall set aside assets beyond the reach of their general
creditors for the purpose of paying benefits under the Plan.

                  Section 11.2. Insurance Contracts. The Compensation Committee
may determine, in its sole discretion, to purchase one or more life insurance
contracts on the Participant's life as a means of reserving assets to pay its
obligations under the Plan. In that event, the Participant shall, as a condition
to receiving any benefits under the Plan, consent to the purchase of that
insurance, execute any application or other forms that the insurer reasonably
requires, and make other reasonable efforts to permit the Company to obtain that
insurance. A Participant or Beneficiary shall not have any interest in, or claim
to, any such life insurance policy.

                  Section 11.3. Rabbi Trust. The Compensation Committee may
determine, in its sole discretion, to establish a Rabbi Trust. In such event,
the Company may, from time to time, transfer assets to the trust, but shall not
be required to transfer funds if it so decides.

                                       9
<PAGE>
                                   ARTICLE XII
                                  MISCELLANEOUS

                  Section 12.1. Relationship. Notwithstanding any other
provision of this Plan, this Plan and action taken pursuant to it shall not be
deemed or construed to establish a trust or fiduciary relationship of any kind
between or among the Employer, the Participant, the Beneficiary, or any other
persons. The right of the Participant and the Beneficiary to receive payment of
deferred compensation is strictly a contractual right to payment, and this Plan
does not grant nor shall it be deemed to grant the Participant, the Beneficiary,
or any other person any interest in or right to any of the funds, property, or
assets of the Employer other than as a general creditor of the Employer.

                  Section 12.2. Other Benefits and Plans. Nothing in the Plan
shall be deemed to prevent the Participant from receiving, in addition to the
deferred compensation provided for under the Plan, any funds that may be
distributable to him at any time under any other present or future retirement or
incentive plan of the Employer.

                  Section 12.3. Alienation of Benefits. Neither the Participant
nor any Beneficiary shall have the power to transfer, assign, pledge, alienate,
or otherwise encumber in advance any of the payments that may become due under
the Plan, and any attempt to do so shall be void. Any payments that may become
due under the Plan shall not be subject to attachment, garnishment, or execution
or be transferrable by operation of law in the event of bankruptcy, insolvency,
or otherwise.

                  Section 12.4. Benefit. This Plan shall be binding upon and
inure to the benefit of the Employer and its successors and assigns.

                  Section 12.5. No Employment Guarantee. Except as otherwise
expressly provided, neither the Plan nor any action taken hereunder shall be
deemed to give a Participant the right to be retained as an Employee of the
Employer or to interfere with the right of the Employer to alter the
responsibilities and duties or to discharge the Participant at any time.

                  Section 12.6. Tax Withholding. The Employer may withhold from
any payment due hereunder any taxes required to be withheld under applicable
federal, state, or local tax laws or regulations.

                  Section 12.7. Tax Liability. The Employer does not expressly
or impliedly guarantee the federal, state and local tax consequences of
participation in the Plan.

                                       10
<PAGE>
                                  ARTICLE XIII
                            AMENDMENT AND TERMINATION

                  Section 13.1. Amendment. The Company, by a duly authorized
action of the Board of Directors or a designated committee, reserves the right
to amend the Plan at any time, including the right to modify the Earnings Rate
on a prospective basis. No amendment shall reduce any benefits accrued under the
Plan prior to the date the amendment was duly authorized.

                  Section 13.2. Termination. The Company reserves the right to
terminate the Plan at any time, as it deems appropriate. Upon termination of the
Plan, no further Participant deferrals or Employer contributions shall be made
to the Plan. Distribution shall be made in a single, lump sum distribution,
within fifteen (15) days of the Plan's termination date.

                  Tower Financial Compensation has caused this Plan to be
executed by its duly authorized officers, as of the 14th day of January, 2002.

                                             By: /s/ Donald F. Schenkel
                                                 ------------------------------
                                                         Signature

                                                       President and CEO
                                                 ------------------------------
                                                         Office

ATTEST:

/s/ Kevin J. Himmelhaver
-------------------------------
         Signature

EVP / CFO / Secretary
-------------------------------
         Office

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